Riyadh: Mohammed bin Salman, Deputy Crown Prince and Defense Minister of Saudi Arabia, who also heads Saudi Aramco, which controls the world’s second-largest oil reserves, two days before he launched 'Vision 2030' to reduce oil depdendency and ensure sustainable development, said declining oil prices is not at all worrisome for the Kingdom.
“We don’t care about oil prices — $30 or $70, they are all the same to us. This battle is not my battle", the high profile Prince said in aninterview with BloomBerg Businessweek.
The likely future king of Saudi Arabia said he didn't care if oil prices rise or fall.
"If they go up, that means more money for nonoil investments. If they go down, Saudi Arabia, as the world’s lowest-cost producer, can expand in the growing Asian market", he said.
On April 25, the Prince unveiled his “Vision for the Kingdom of Saudi Arabia,” a historic plan encompassing broad economic and social changes.
The plan includes the creation of the world’s largest sovereign wealth fund, which will eventually hold more than $2 trillion in assets — enough to buy all of Apple, Google, Microsoft, and Berkshire Hathaway, the world’s four largest public companies.
Prince Mohammed bin Salman plans an IPO that could sell off “less than 5 percent” of Saudi Aramco, the national oil producer, which will be turned into the world’s biggest industrial conglomerate. The fund will diversify into nonpetroleum assets, hedging the Kingdom’s nearly total dependence on oil for revenue.
The tectonic moves “will technically make investments the source of Saudi government revenue, not oil,” the prince said.
“So within 20 years, we will be an economy or state that doesn’t depend mainly on oil", he added.
BloomBerg also said the Prince scuttled a proposed freeze of oil production on April 17 at a suppliers’ meeting in Qatar because archrival Iran wouldn’t participate.
Observers saw it as extremely rare interference by a member of the royal family, which has traditionally given the technocrats at the Petroleum Ministry ample room for maneuver on oil policy.
Last year there was near-panic among the prince’s advisers as they discovered Saudi Arabia was burning through its foreign reserves faster than anyone knew, with insolvency only two years away.
Plummeting oil revenue had resulted in an almost $200 billion budget shortfall— a preview of a future in which the Saudis’ only viable export can no longer pay the bills, whether because of shale oil flooding the market or climate change policies.
Historically, the kingdom has relied on the petroleum sector for 90 percent of the state budget, almost all its export earnings, and more than half its gross domestic product.
But, Prince Mohammad, it is said, is of a notion that Saudi Arabia must fundamentally change, or else face ruin in a world that is trying to leave oil behind.