To separate from oil ministry, Saudi restructures state-owned ARAMCO

Saudi Arabia’s Supreme Economic Council has approved a restructuring of state oil company Saudi Aramco that includes separating it from the oil ministry, Al Arabiya television channel reported on Friday, citing sources.

There are no indications that the move will lead to changes in the fundamental way the world’s top crude exporter makes its oil decisions.

However, some said the restructuring might be only the first step in a shake-up of the Saudi energy sector, and possibly pave the way for a prince to take over the ministry itself, which is traditionally run by technocrats rather than members of the royal family.

“Saudi Supreme Economic Council agrees on Deputy Crown Prince Mohammed bin Salman’s vision of restructuring oil-giant Aramco,” Arabiya reported on its Twitter account.

“Restructuring of Saudi Aramco includes separation from petroleum ministry,” the channel said.

The Supreme Economic Council is a new body formed by King Salman earlier this year to replace the Supreme Petroleum Council, which used to help set the kingdom’s oil policy.

The new council is headed by the king’s son Prince Mohammed, a move seen by analysts as laying the ground for a generational shift in how Riyadh develops its energy and economic strategies.

On Wednesday, King Salman appointed Saudi Aramco’s chief executive as chairman of the state oil firm and health minister, as part of a major reshuffle in the OPEC kingpin.

Aramco officials could not be immediately reached for comment.

Mohammad Al Sabban, a former senior adviser to oil minister Ali al-Naimi, said the move would strengthen Aramco. “This decision will bring more flexibility to the company to take decisions on a commercial basis, and keep full financial control,” he said.

Aramco was once U.S.-based and run by Americans but has long been a Saudi state corporation. It dwarfs all others in the industry, with crude reserves of 265 billion barrels, more than 15 percent of all global oil deposits.

It produces over 10 million barrels per day, three times as much as the world’s largest listed oil company, ExxonMobil , while its reserves are more than 10 times bigger. If Aramco were ever to go public, it would probably become the first company ever to be valued at $1 trillion or more.