Saudi Arabia is preparing for the end of the oil age by creating a $2trillion investment fund which is set to be ‘the largest on Earth’.
The Public Investment Fund (PIF) established by the kingdom’s second-in-line to the throne will eventually be large enough to buy Google, Apple and Microsoft with money to spare.
Deputy Crown Prince Mohammed bin Salman, who oversees the fund, claims that the initial public offering could happen as soon as next year.
It comes as Saudi Arabia, the world’s biggest crude exporter, insists that it will only freeze its oil output if other key producers, including Iran, take a similar measure.
‘What is left now is to diversify investments,’ the 30-year-old prince told Bloomberg, during an interview from the royal compound in the kingdom’s capital, Riyadh.
‘So within 20 years, we will be an economy or state that doesn’t depend mainly on oil.’
It is nearly 80 years since the first oil was discovered in Saudi Arabia but, with crude prices plummeting worldwide, the nation plans to shake its dependence on the market.
One of the first steps will be for Saudi Arabia to sell shares in Aramco’s parent company, which will transform the oil giant into an 'industrial conglomerate'
Although the proportion of foreign investments is currently at just five per cent of the fund, PIF plans to increase it to 50 per cent by 2020.But if all goes to plan, the fund will eventually be large enough to buy all four of the world’s largest publicly traded companies – Apple Inc., Google parent company Alphabet Inc., Microsoft Corp. and Berkshire Hathaway Inc.
But Prince Mohammed said he doesn’t believe the kingdom has a ‘real problem’ when it comes to low oil prices, despite the fact the price of a barrel of crude oil has more than halved.
‘Undoubtedly, it will be the largest fund on Earth,’ added the prince. ‘This will happen as soon as Aramco goes public.’
The prince went on to confirm that Saudi Arabia will only freeze its oil output if other key producers, including Iran, take a similar measure.
‘If all countries agree to freeze production, we’re ready,’ he said.
It is nearly 80 years since the first oil was discovered in Saudi Arabia but, with crude prices plummeting worldwide, the nation plans to shake its dependence on the market
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