DUBAI (Reuters) - The downgrade of Energy Minister Khalid al-Falih for the second time by removing him from his duties as chairman of Saudi Aramco suggests big problems, a report on Oil Price said on Monday.
Although Al-Falih was fully supported by Saudi Crown Prince Mohammed bin Salman, his influence diminished considerably following changes in the kingdom's power structures, writer Cyril Wiedershoven said in his website.
He added that the division of the Ministry of Energy - which is the main power center of al-Falih - which happened last week, revealed the existence of cracks during his tenure.
A few days ago, al-Falih was replaced by Yasser al-Rumayyan, head of the sovereign wealth fund and a close associate of Mohammed bin Salman. The appointment is a step in support of Aramco's initial public offering (IPO) and the project that forms the backbone of bin Salman's vision to diversify the economy.
|Wiedershoven: Falih's removal from Aramco presidency poses threat to future of oil giant|
"Rumors abound that al-Falih and some parties have warned Mohammed bin Salman against reconsidering the initial public offering and its objectives. In contrast, these differences remained under the control of the Saudi leadership," the writer said.
The restructuring of Aramco, the Ministry of Energy and other key government authorities such as the Saudi Public Investment Fund, the appointment of Fahad Al-Essa as head of the Royal Court, and Mazen Al-Kahmous as chairman of the National Anti-Corruption Committee reveal the growing strength of Mohammed bin Salman.
He said all newly appointed presidents and ministers, including the new Minister of Industry and Mineral Resources Bandar al-Khuraif, were among bin Salman's supporters.
It appears that Mohammed bin Salman and his supporters behind the initial public offering of Aramco and the diversification of the Saudi economy appear to be stepping up their moves to assert full control over the kingdom.
"Anyone who opposes or undermines the goals set by the crown prince, or even threatens the success of Saudi Arabia's Vision 2030 or Aramco's initial public offering, will be excluded or completely removed."
It is certain that this marginalization will continue in the next two weeks, as the Kingdom is preparing for a new era, as bin Salman continues to strengthen his position and gradually address any potential opposition, the writer writes in his report.
Risks in the future
Bin Salman's strategy to control decision-making in Saudi Arabia has become clear since 2017, with the anti-corruption campaign arresting members of the royal family, businessmen and power holders at the Ritz Hotel in Riyadh.
He said the ongoing conflict in the oil price market caused by al-Falih did not provide the additional revenues the kingdom had hoped to achieve.
As a result, Saudi Arabia needs a new person to support the success of Aramco's IPO.
Al-Falih's removal from the presidency of Aramco poses a threat to the future of the oil giant, contradicting decades-old traditions under which the energy minister has long held the position of president of Aramco.
It is believed that although Mohammed bin Salman's authority is growing day by day, the chance of opposition from the conservative forces in the government remains open.