"Ex-Im has provided near record-breaking loans to subsidize a firm co-owned by Saudi Aramco—the world’s largest oil company."...Many banks were unwilling to make loans in the area due to upheaval from the so-called Arab Spring, so US taxpayers were volunteered via Export-Import Bank.
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5/1/15, "Saudi Arabia restructures oil giant Aramco," Reuters, by Rania El Gamal and Reem Shamseddine, DUBAI/KHOBAR, Saudi Arabia
"Saudi Arabia is restructuring the world's biggest energy company, Saudi Aramco, in a move apparently aimed at letting it operate more at arm's length from the powerful oil ministry.
Analysts expected technocrats to get a freer hand in running the state-owned giant. Some said the restructuring might be the first step in a shake-up of the Saudi energy sector, and could possibly pave the way for a prince to take over the ministry itself, which is traditionally run by industry experts rather than members of the royal family.
Citing unnamed sources, Saudi-owned Al Arabiya TV reported on Friday that Aramco would be separated from the oil ministry of the top OPEC member. Aramco officials could not be immediately reached for comment but Arabiya's reports closely reflect official thinking.
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.
Conventional thinking is that the ruling Al Saud family views the oil minister's job as so important that giving it to a prince might upset the dynasty's delicate balance of power and risk leaving oil policy hostage to princely politicking.
But Ehsan Ul-Haq, oil analyst at KBC Energy Economics, said it was highly likely that Prince Abdulaziz bin Salman, a son of King Salman, could be appointed to replace 79-year-old Naimi, who has been oil minister since 1995.
The king promoted Prince Abdulaziz, long a member of Saudi Arabia's OPEC delegation, to deputy oil minister from assistant oil minister earlier this year. Some diplomatic and Saudi sources have suggested his years of experience might overcome the hurdles to a royal becoming oil minister.
"They are trying to rearrange Aramco and restructure the whole company. They are also trying to restructure the oil ministry and name Prince Abdulaziz as minister of energy," said an industry source in Saudi Arabia.
"So that way, Aramco will be totally business-oriented, not an arm of the petroleum ministry."
MAJOR RESHUFFLE
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 to be valued at $1 trillion or more.
As part of a major reshuffle on Wednesday, King Salman moved Khalid al-Falih from chief executive to chairman of Aramco and also appointed him health minister -- changes that may indicate Falih will not become oil minister, Ul-Haq said.
"(Falih's) shift to the health ministry suggests that he might not follow Naimi. His appointment to the chairman of Aramco, on the other hand, is only ceremonial," he added.
Aramco's senior vice-president Amin al-Nasser has been named acting chief executive until further notice, the company said on its Twitter account on Friday. Earlier, it had posted a statement saying Aramco has a new 10-member supreme council headed by the kingdom's deputy crown prince.
"The 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 the petroleum ministry."
The Supreme Economic Council, formed by King Salman earlier this year, replaces the Supreme Petroleum Council, which used to help set the kingdom's oil policy.
The new council is headed by Deputy Crown Prince Mohammed, another son of the king, a move seen by analysts as laying the ground for a generational shift in how Riyadh develops its energy and economic strategies.
The main tenets of Saudi oil policy -- including maintaining the ability to stabilise markets via an expensive spare-capacity cushion and a reluctance to interfere in the market for political reasons -- are set by the top members of the ruling Al Saud family.
Oil minister Naimi, who has seen several oil price crashes during his tenure, was the driving force behind OPEC's decision in November not to cut production to support prices, which have halved since June 2014, but rather maintain its market share.
On Thursday, Naimi was quoted as saying that King Salman's appointment of two new heirs would help stabilise world oil markets by strengthening political stability in the kingdom."
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5/1/15, "Saudi Arabia shakes up state oil firm Aramco," BBC
"Saudi Arabia's state oil company is to be separated from the oil ministry as part of a wider restructuring.
The new 10-member council is headed by the King's son, Prince Mohammed bin Salman.
He was appointed this week as the new deputy crown prince and is regarded as second in line to the throne.
On Wednesday, King Salman appointed Saudi Aramco's chief executive Khalid al-Falih as chairman of the company and health minister as part of a major political reshuffle. He has been replaced by Aramco senior vice-president Amin al-Nasser.
The main facets of Saudi oil policy - including maintaining the ability to stabilise markets by holding extensive reserves and a reluctance to interfere in the market for political reasons - are set by the top members of the ruling royal family.
There are no signs that the move will lead to any significant changes in the way that the world's top oil exporter and de facto Opec leader makes its decisions.
However, separating Aramco from the oil ministry is likely to be just the first step in a shake-up of the Saudi oil sector,
according to analysts.
Mohammad al-Sabban, a former senior adviser to Saudi oil minister Ali al-Naimi, said: "This decision will bring more flexibility to the company to take decisions on a commercial basis, and keep full financial control."
Delicate balance
The move could pave the way for a prince to be appointed as the next oil minister to replace 79-year-old Mr al-Naimi.
It had been thought that the royal family regarded the role of oil minister as so important that giving it to a prince could upset the kingdom's delicate balance of power and risk making oil policy hostage to bickering among the many princes.
Earlier this year, King Salman promoted his son, Prince Abdulaziz bin Salman - a long-serving member of Saudi Arabia's Opec delegation - to the role of deputy oil minister from assistant oil minister.
Ehsan ul-Haq, oil analyst at KBC Energy Economics, said it was highly likely that Prince Abdulaziz, a son of the King, could be appointed oil minister.
"[Falih's] shift to the health ministry suggests that he might not follow Naimi. His appointment to the chairman of Aramco, on the other hand, is only ceremonial," he said.
Aramco could not be reached for comment."
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4/30/15, "The Bank to Nowhere," Wall St. Journal, K. Strassel
"A campaign against the crony Export-Import bank is picking up steam."
"Ex-Im has provided near record-breaking loans to subsidize a firm co-owned by Saudi Aramco—the world’s largest oil company."...
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2012: "The U.S. Export-Import Bank approved a $5 billion loan to Sadara Chemical Co., a joint venture between Saudi Aramco and Dow Chemical Co., the bank said on Sept. 27. The credit for construction of a petrochemical complex boosted total Ex-Im Bank loans in the region this year to $8.9 billion."...
10/18/2012, "Aramco Draws on Export Finance as Bank Loans Wither: Arab Credit," Bloomberg
"Middle Eastern and North African companies planning $740 billion in energy projects will need to tap foreign export credit agencies and local banks as commercial lending to the industry slumps to a nine-year low....
Saudi Arabian Oil Co., known as Saudi Aramco, and Qatar Petroleum are already turning to export credit agencies, state-backed lenders that finance purchases of equipment and materials from their countries. Political upheaval from the so-called Arab Spring has made global banks more wary of the region. Bonds hold scant appeal as an alternative to loans because many energy companies in the Middle East and North Africa lack ratings....
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US Ex-Im Bank
Export credit has gained favor among borrowers in the six-nation Gulf Cooperation Council as debt woes constrain European lenders. Saudi Electricity Co. may seek such funds next year to meet $10 billion in capital expenditure, Manish Manchandya, the head of corporate finance, told reporters in Dubai on Oct. 9.
The U.S. Export-Import Bank approved a $5 billion loan to Sadara Chemical Co., a joint venture between Saudi Aramco and Dow Chemical Co., the bank said on Sept. 27. The credit for construction of a petrochemical complex boosted total Ex-Im Bank loans in the region this year to $8.9 billion....
“The total cost of financing for power projects is unlikely to come down much further,” said Padmanathan of ACWA Power. “If anything, they will start creeping back up to the 2000-2010-era levels.”"
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