JEDDAH, 29 April — The Kingdom is looking at the possibility of privatizing some of the operations of the government-owned Saudi Aramco, the world’s biggest oil-producing company, Saudi Minister of Petroleum Ali Al-Naimi said on Saturday.
“We are studying the possibility of privatizing some of Saudi Armco’s operations” the minister said addressing Saudi Aramco staff in Houston.
Oil industry sources said that the Aramco privatization scheme has been in the pipeline since the late 1990s.
Saudi Aramco was a joint venture with private oil companies until the 1980s, when the Kingdom acquired 100-percent interest in its assets.
The minister also spoke of the Kingdom’s decision — unveiled at an energy conference in Riyadh in November — to set up a publicly held energy services company.
The holding company, which could draw an initial investment of $160 million to $220 million, would be similar, but not identical to the industrial giant, Saudi Basic Industries Corp. (SABIC).
Naimi said Saudi Aramco currently outsources many support services to the Saudi private sector to help spread the wealth generated by its oil production.
“We in the Ministry of Petroleum are embarking on establishing a publicly owned company, which will provide support services to the petroleum and energy sector.
“This covers engineering, seismic surveying, drilling some products and others,” Naimi also said in his speech.
Majority ownership in the company would come courtesy of the Saudi private sector, while the government would participate via two existing oil services companies — Arabian Drilling Co. and the Arabian Geophysical and Surveying Co.
While under Saudi corporate law, foreign firms cannot invest in joint stock companies, they will be allowed to form joint ventures with subsidiaries of the holding company. The minister also stressed the strong ties between the Kingdom and the United States, the world’s biggest oil consumer.
“The economic and political relations that bind the US and Saudi Arabia and those that bind the Saudi petroleum industry and its American counterparts — especially Texas — are strong,” Naimi said.
“Our hope is that these relations continue to develop for the betterment of both sides and that Saudi-American ties are not affected by those who might try to disrupt this relationship,” he added.
