Investments, not crude, will bankroll government in twenty years, says deputy crown prince as he plots sale of state oil company Aramco

By Alex Pashley

Saudi Arabia, a kingdom predicated on oil production, is anticipating its end days by creating the world’s largest sovereign wealth fund from selling shares in its prized state oil company.

The top global petroleum exporter will launch an initial public offering of Saudi Aramco as soon as next year, second-in-line to the throne Mohammed bin Salman told Bloomberg in an interview on Friday.

“IPOing Aramco and transferring its share to [Public Investment Fund] will technically make investments the source of Saudi government revenue, not oil,” the prince said.

“What is left now is to diversify investments. So within 20 years, we will be an economy or state that doesn’t depend mainly on oil.”

The prince has an “obsession” about moving the Kingdom away from oil, said Bloomberg editor-in-chief John Micklethwait, who interviewed him for five hours.

“This fund… is an amazing thing. It’s enough to buy Google, Microsoft, Alphabet… and they’d still have change to spare. It’s a rather dramatic plan in terms of the economic transformation of the country,” he said.

Almost 80 years since the first Saudi oil was discovered, King Salman’s 30-year-old son is bidding to wean the kingdom off fossil fuels in the future.

Oil exporters are suffering from a collapse in prices, leaving dire shortfalls in government spending.

The planned sovereign wealth fund, estimated to be worth at least $2 trillion, would eclipse that of Norway and Abu Dhabi and be big enough to buy the world’s four largest publicly listed companies.

In January, the prime minister of the United Arab Emirates said he would “build an economy that is independent of oil and market fluctuations alike”, in a sign of a region in flux.