Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. MARKETS
September 03, 2019 01:38 PM

Saudis replace Aramco chairman ahead of IPO

Bloomberg
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg
    Saudi Arabia's energy minister, Khalid Al-Falih

    Saudi Arabia removed Energy Minister Khalid Al-Falih from his position as chairman of Saudi Aramco, the second time his role has been scaled back in less than a week, as the government prepares to sell shares in the state-owned oil company.

    Mr. Falih said on Twitter that he will be replaced by Yasir Al-Rumayyan, head of the sovereign wealth fund. The appointment of Mr. Rumayyan, already an Aramco board member and a key adviser to powerful Crown Prince Mohammed Bin Salman, will separate the Ministry of Energy from Aramco and avoid conflicts of interest as the company prepares for the upcoming initial public offering, according to a source familiar with the thinking behind the decision.

    Selling a stake in Aramco, which could be the world's largest IPO, is a key part of Prince Mohammed's plan to wean the Saudi economy off reliance on oil. Plans for the IPO were put on hold last year as Aramco focused on the $69 billion acquisition of a majority stake in a state chemical maker. The kingdom's de facto ruler has said he expects Aramco to be valued at over $2 trillion, but analysts see $1.5 trillion as more realistic.

    Still, the IPO process accelerated again after Aramco completed a $12 billion bond sale in April. International banks started pitching for a role on the IPO last week, according to people familiar told Bloomberg.

    "I suspect they want to accelerate the IPO timeline," said Helima Croft, chief commodities strategist at RBC Capital Markets. The Saudi authorities want to "bring a sense of urgency to the issue as this is a big signature initiative of Crown Prince Mohammed."

    The move to split oversight of Aramco from the Energy Ministry ends decades of tradition and further reduces Mr. Falih's portfolio after he lost the industry and mining functions in a government reshuffle on Friday. It also highlights the growing importance of the Public Investment Fund, which is set to receive proceeds from the Aramco IPO to reinvest both inside and outside the kingdom.

    "I congratulate my brother His Excellency Mr. Yasser Othman Al-Rumayyan," Mr. Falih's Tweet said. It's "an important step to prepare the company for the public offering, wishing him every success."

    When he was first appointed energy minister in 2016, Mr. Falih directed a U-turn in Saudi policy in the face of a U.S. shale boom and tumbling crude prices. He led the Organization of Petroleum Exporting Countries to agree to reduce output for the first time in eight years, starting in January 2017, and persuaded other big producers including Russia to join in the cuts. After failing to re-balance the market, Mr. Falih organized extensions of the curbs, involving roughly 60% of the world's oil output, through March 2020.

    "All this shows that in Saudi Arabia there has been some dissatisfaction at the highest levels on how things have been going," said Olivier Jakob, managing director at consultant Petromatrix in Zug, Switzerland. "Al-Falih has not really fully delivered on oil prices. He hasn't delivered the price that's required by the Saudi budget. There's speculation that prices and the IPO are linked and they need higher prices to get the valuation they want for the IPO."

    The country needs crude to trade near $80 a barrel to balance its budget, according to research from the International Monetary Fund and Bloomberg Intelligence. It also needs higher oil prices to achieve a valuation at least close to what Prince Mohammed set as a target.

    To bolster prices, Saudi Arabia has cut production to less than 10 million barrels a day as part of its agreement with OPEC to limit output. Mr. Falih helped broker the deal that brought other producers like Russia into the effort to balance markets by curbing production. The Saudis are doing most of the heavy lifting to support the deal, pumping about 500,000 barrels a day less than they pledged.

    Mr. Rumayyan, a former banker with Saudi Fransi Capital, is governor of the PIF, as the sovereign fund is known, leading its transformation from a sleepy domestic holding company into one of the biggest investors in global technology start-ups. The fund has accumulated stakes in electric carmaker Tesla Inc., ride-sharing company Uber Technologies Inc. and has made a $45 billion commitment to SoftBank Group Corp.'s $100 billion technology fund.

    The kingdom's original plan, announced by Prince Mohammed in 2016, was to sell about 5% of Aramco on the Riyadh exchange and at least one international bourse. The listing was pushed back to 2020 or 2021 to allow Aramco to complete the $69 billion acquisition of Saudi Basic Industries Corp.

    Related Articles
    Saudi Aramco to restart preparations for mega IPO
    Aramco's $12 billion bond deal fizzles in second day of declines
    How Blackstone landed $20 billion from Saudis for new fund
    Recommended for You
    SP500June2022_i.jpg
    Stock doomsayers vindicated in historic first half
    Market-ticker-red2022_i.jpg
    Stocks crushed as recession jitters jolt trading
    ONLINE_180509969_AR_0_TABEPHATBADK.jpg
    Goldman to pull out of most SPACs over threat of liability
    A Good Time for Trend Following
    Sponsored Content: A Good Time for Trend Following

    Reader Poll

    June 6, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Nearing the finish line: Ideas on end-state investing for corporate DB plans
    The Meaning of "Portfolio Intelligence"
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Crossroads: Politics, Inflation, & Bonds
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    July 4, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit