Saudi Arabia plans to set up a $2 trillion mega fund for post-oil era, Bloomberg reported on Friday, citing Saudi deputy crown prince Mohammed bin Salman.”Deputy Crown Prince Mohammed bin Salman laid out his vision for the Public Investment Fund, which will eventually control more than $2 trillion and help wean the kingdom off oil,” Bloomberg said on its website.
It said it had conducted a five-hour conversation with the senior Saudi prince who oversees ministries including finance, oil and the economy through the Council for Economic and Development Affairs.Mohammed bin Salman also said Saudi Arabia will agree to freeze crude oil production levels only if Iran and other major producers do so.
Iran has said it will not join fellow OPEC and non-OPEC members in a plan to be discussed in a Doha conference on April 17 to freeze oil production in an attempt to boost prices.Iran wants to revive its oil industry following the lifting of international sanctions as part of an international deal over Tehran’s nuclear programme.
“If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers decide to freeze production, we will be among them,” Mohammed bin Salman said.The comment by the 30-year-old prince is likely to dampen hopes for a deal. Benchmark Brent crude fell below $40 per barrel on Friday, with the market growing increasingly sceptical about the success of any deal.
Bin Salman nevertheless said Saudi Arabia was ready to face a prolonged period of low oil prices that have dropped sharply since mid-2014 as a result of higher global production.”I don’t believe that the decline in oil prices poses a threat to us,” he said.Iran is expected to add half a million barrels of oil supply a day within a year from its existing oilfields after the lifting of sanctions, but developing new fields would take time, the head of the International Energy Agency said on Wednesday.
The crown prince also outlined plans to create a sovereign fund which will eventually control $2 trillion in assets and help wean the kingdom off oil. It will include selling up to 5 percent in shares in Saudi’s national oil company Aramco.”IPOing Aramco and transferring its shares to PIF (public investment fund) will technically make investments the source of Saudi government revenue, not oil,” the prince said.
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