Is Saudi Arabia signalling the end of the oil age? There has been a lot in the press overt the last few days about the sell off of Aramco and this signifying the end of the oil age. The Saudis have been quoted as saying they think the oil age is coming to an end and this is why they want to sell off their state oil company Aramco. This would yield a 2 trillion dollar sovereign wealth fund which they would invest abroad to survive after the oil age. However as some sceptics in the press rightly raise is this really what is going on?
Firstly, its only going to raise 2 trillion dollars if the country flogs the lot. Is Saudi Arabia really going to sell everything off leaving no control over any part of it. There is talk of selling 5% for starters. Still a huge amount of money but hardly a sovereign wealth fund.
The second question is are the Saudis going to open up their books to the world particularly as regards reserves, which many people think are overstated?
Lastly, will the Saudi public actually see the money after the last few days news about the “Panama Papers”?
A sovereign wealth fund is a great idea but can only help an economy not substitute for it. Saudi Arabians will need something to do on a day to day basis. Also as this article suggests maybe they have not given up on oil totally after all…