Saudi Arabia plans $2 trillion post-oil investment fund

Saudi Arabia plans to set up a $2 trillion sovereign wealth fund to help it thrive in the post-oil era, according to the kingdom’s deputy Crown Prince Mohammed bin Salman.

Cited in a report by Bloomberg, Prince Mohammed is said to have laid out a vision for the Public Investment Fund which will help wean Saudi Arabia off oil, part of which will include selling up to 5 per cent in shares in Aramco’s parent company and turning the oil giant into an industrial conglomerate – a move that could happen as early as 2017.

“IPO-ing Aramco and transferring its shares to PIF will technically make investments the source of Saudi government revenue, not oil,” the prince is quoted as saying.

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

The plans could see the fund growing to be bigger than the world’s four largest publicly traded companies combined; Apple Inc, Alphabet Inc, Microsoft Corp, and Berkshire Hathaway.

“Undoubtedly, it will be the largest fund on earth. This will happen as soon as Aramco goes public,” said the prince.

Bloomberg‘s interview also covered the issue of crude oil production levels, which Prince Mohammed said Saudi Arabia would agree to freeze only if Iran and other major producers do so too.

He said: “If all countries agree to freeze production, we’re ready. If there is anyone that decides to raise their production, then we will not reject any opportunity that knocks on our door.”

A meeting between major oil producers will take place in Doha, Qatar, on April 17. Led by Russia and Saudi Arabia the meeting will include discussion over measures to stabilise prices, including a proposal not to produce oil above a certain level. The summit is a follow-up to talks in February between Qatar, Russia, Saudi Arabia and Venezuela, during which they tabled the idea of an output freeze.