Saudi Aramco to welcome oil investors
Industry

Saudis Seem Poised to Welcome Oil Investors

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In the challenge to forge a new world in the oil business, Saudi Arabia finds itself seeking different avenues toward delivering revenue to the kingdom. However, they’re also fighting off other countries that are seeking to chip away a good portion of the lucrative market share that the Saudis have enjoyed for decades.

One of the measures discussed is to have foreign investors pool their money to invest directly into Saudi Arabia’s nationalized oil industry. The thought is that these companies would be allowed to invest in Saudi Aramco, which is run by the state. That investment would allow them privileges that previously weren’t available when it comes to exploration, drilling and sale of crude oil.

Two countries that have previously done this are Venezuela and Iraq, with neither a threat to come close to offering a sustained challenge. The economic collapse in Venezuela caused by the slide in oil prices has been marked by upheaval in the streets and rampant inflation. Meanwhile, Iraq still finds itself mired in conflict, with terrorist groups like ISIS hijacking oil deposits for their own benefit.

Another Middle Eastern neighbor that has designs on challenging Saudi Arabia is Iran, which made a concerted effort last year to ramp up oil production. Despite the continuing collapse of the market, Iran still increased their production by 740,000 barrels.

Regardless of that effort, it seems clear that weathering that challenge shouldn’t be difficult for the Saudis. For one thing, Iran continues to be plagued by political infighting and a reputation as a haven for terrorist groups like ISIS.

While such red flags haven’t dissuaded China from purchasing those resources, multinational businesses prefer more stability in their dealings. That’s something that Saudi Arabia can offer, which means the sales pitch should succeed.

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