Saudi Arabia appoints PIF chief as Aramco chairman

Yasir Al Rumayyan's appointment comes days after the kingdom split its energy, industry and mineral resources ministry

Under Mr Al Rumayyan, the PIF sold its stake in Sabic to Aramco and also picked up the mandate for 70 per cent of the kingdom's renewable projects. Pawan Singh / The National

Saudi Arabia appointed Yasir Al Rumayyan, the governor of the kingdom’s Public Investment Fund, as chairman of Saudi Aramco, replacing energy minister Khalid Al Falih.

The move comes as the state oil company looks to distance the energy ministry from Aramco to avoid a conflict of interest and as it aims to tap broader investor appeal ahead of a planned listing.

Mr Al Falih congratulated his successor in a tweet on Monday, saying his appointment "comes as an important step to prepare the company for a public offering."

Mr Al Rumayyan is head of the sovereign wealth fund that manages around $320 billion (Dh1.2 trillion) in assets on behalf of the Saudi state. His appointment comes days after a royal decree from King Salman split the energy, industry and mineral resources ministry into two, leaving the core energy portfolio with Mr Al Falih. Businessman Bandar Alkhorayef has been appointed head of the new industry and mineral resources ministry, which will assume responsibility for the portfolio in the next fiscal year.

The move is seen as a streamlining of efforts as the kingdom prepares to list 5 per cent of Saudi Aramco at the end of this year or early 2020, according to recent reports. The Wall Street Journal reported last week that Saudi Arabia may split the initial public offering into two stages, with the first tranche likely to take place this year on the domestic Tadawul exchange.

A foreign listing could take place as early as next year or 2021, with Tokyo emerging as a front runner, to avoid possible political and legal complications from a listing in New York, London or Hong Kong.

On Friday Aramco said the company continued to engage with the shareholders on “IPO readiness activities”.

“The company is ready and timing will depend on market conditions and be at a time of the shareholder’s choosing,” Aramco said.

Earlier this year the PIF relinquished its 70 per cent stake in petrochemicals giant Sabic, which Aramco agreed to buy for $69bn. The PIF has recently ventured more into the energy sector, having secured the mandate from the Saudi state to develop 70 per cent of all renewables projects in the kingdom. The sovereign fund has also increased its stake in Saudi utilities developer Acwa Power to 40 per cent from 25 per cent in February.