Saudi Aramco: The Company and the State

Saudi Aramco: The Company and the State

Al Jazeera (2019)

Film Review

It never occurred to me before watching this film that Saudi Aramco, the Saudi oil company isn’t a publicly traded company. In other words, it has no shareholders – it’s entirely owned by the Saudi royal family.

In 2016, Crown Prince Mohammad bin Salman announced plans to do an IPO (initial public offering) and list the company either on Wall Street or the London stock exchange. Had it gone forward, the IPO would have been the largest in global history. Saudi Aramco, which the Saudi government values at $2 trillion, had hoped to sell 5% of the company to private shareholders for $100 billion. The Crown Prince proposed to use these funds to finance his Public Investment Fund and Vision 2030.*

Late last year the IPO was mysteriously cancelled.

International oil analysts dispute whether Aramco is really worth $2 trillion, largely because they question the size of Saudi oil reserves. Despite the absence of any new oil discoveries (and pumping out 100 billion barrels in 30 years), the Saudi government maintains their reserves still stand at 261 billion barrels (as they did in 1989).

When bin Saman’s father Salman bin Abdulaziz Al Saud ascended to the throne in 2015, he made drastic changes to the law of succession, essentially concentrating power in the hands of his son Mohammad. Some of bin Abdulaziz’s brothers remain attached to a system in which the royal family made collective decisions instead of ceding power to a single monarch. Several reportedly opposed Vision 2030, which is why the Crown Prince had them arrested in 2017 and confiscated their estates.

The capital flight triggered by these arrests not only scared off foreign investors, but also cast a cloud over Aramco’s potential ability to attract shareholders.

Analysts also point to other factors in bin Salman’s decision to postpone the IPO:

1. Saudi budgetary problems stemming from military over-commitments in Yemen, Bahrain and Syria.
2. Ongoing economic blockade against regional ally Qatar.
3. The absence of a stable Saudi system of taxation (at present Aramco revenues fund 87% of the government budget).
4. The absence of a a work ethic in Saudi Arabia. Because basic needs are heavily subsidized, the Saudi population doesn’t tend to see work as a valuable part of their lives – leading to enormous government dependence on foreign workers.

---

*Saudi Vision 2030 is a plan to reduce Saudi Arabia’s dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism

 

---

 

Inside the Brutal Reality of Saudi Arabia

Inside the Dark Kingdom: Butchery, Slavery and History of Revolt

Abby Martin (2015)

Film Review

Inside the Dark Kingdom is a documentary celebrating the irony of Saudi Arabia’s selection to head the UN Panel of Human Rights. The blatant hypocrisy of the (successful) US campaign for this tyrannical kingdom to champion global human rights is obvious from the simple statement of facts. As is the duplicity of trying to depose the so-called “bloody dictator” of Syria while openly supporting the Saudi reign of terror.

The film investigates Saudi Arabia’s brutal and arbitrary criminal justice system, their brutal oppression of women, their virtual enslavement of migrant workers, their recent invasion of Yemen, their role in 9-11 and their reliance on US military assistance to suppress human rights organizing.

Saudi trials take place in secret, often without legal representation for the accused. Saudi subjects can be beheaded, stoned or crucified for crimes such as adultery, blasphemy, homosexuality and drug use and imprisoned and lashed for human rights advocacy or being victimized by sexual assault (typically rape victims receive more lashes than the men who rape them). Forty-five percent of Saudi executions are for non-violent drug crimes.

Saudi Uprisings

You rarely hear about Saudi Arabia’s long history of popular uprisings (and their brutal suppression) in the corporate media. The US first began collaborating with the Saudi royal family to suppress human rights in 1953, when Aramco (Arabian Oil Company workers) went on strike demanding a union. The US responded by establishing the US Training Mission in Saudi Arabia, which assisted the Saudi government in torturing and assassinating union leaders.

Saudi Arabia had their first failed revolution in 1962, when a Shia-led uprising demanded that oil profits be used to address poverty rather than to increase the wealth of American oil companies and the Saudi royal family.

Inspired by the 1979 revolution in Iran, rebels in the eastern Shia region of Saudi people launched massive street protests. These were crushed when the government tortured and assassinated key leaders and destroyed (via bombing) of dissident civilian enclaves.

The Saudi Arab Spring

Following the Arab Spring rebellions that blossomed in Tunisia and Egypt in 2011, there were Arab Spring rebellions in three major Saudi cities. The royal family responded by declaring martial law and banning any mainstream or social media favorable to the Arab Spring or unfavorable to the royal family. After arresting, torturing and/or assassinating of key organizers (and their families), the government immediately quadrupled their arms imports from the US.

The primary purpose of all this military hardware is to suppress dissent, not only in Saudi Arabia, but in Bahrain (the Saudi Army invaded Bahrain to suppress their Arab Spring uprising) and Yemen. Since April, 150,000 Saudi troops have invaded Yemen and killed 4,000 Yemenis – more than half of them civilians.

The 1945 Oil Protection Agreement

Martin also traces the history of the unique US-Saudi relationship, which started in 1945 with the signing of an official Oil Protection Agreement and the installation of a US naval base.

Dating back to 1988 the last four US presidents have had close business and personal relationships with the Saudi royal family. At present the Saudi princes are major donors to the Clinton Foundation.