Energy Russia’s top Saudi negotiators praise Falih, say shake-up won’t hurt ties

Russia’s top Saudi negotiators praise Falih, say shake-up won’t hurt ties

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Russian Energy Minister Alexander Novak

Changes in the Saudi Arabia’s oil industry will not affect cooperation between Moscow and Riyadh, Russia’s Energy Minister Alexander Novak and Kirill Dmitriev, head of the RDIF sovereign wealth fund, said.

This week Saudi Arabia named Yasir al-Rumayyan, head of the kingdom’s PIF sovereign wealth fund as chairman of Saudi Aramco, replacing Khalid al-Falih as the company prepares for an initial public offering (IPO).

The move came after Saudi Arabia created a new ministry for industry and mineral resources, separating it from the energy ministry.

The separation and the appointment of Rumayyan appear to diminish the authority of Falih, who retained control of the energy portfolio.

“We will continue our international cooperation with our colleagues, with my friend Mr. Falih,” Novak said. He said he planned to visit Saudi Arabia to prepare for Russian President Vladimir Putin’s trip there scheduled in October.

Ties between Russia and Saudi Arabia have developed in the last couple of years after the two countries, along with members of the Organization of the Petroleum Exporting Countries (OPEC) and some non members joined forces to curb output to support prices.

Russian Direct Investment Fund (RDIF) boss Dmitriev, a key player in the deepening cooperation between Moscow and Riyadh, praised work with Falih and said that all existing plans remain unchanged.

“Saudi Arabia is an absolutely key partner for us. Khalid al-Falih… has played an absolutely key role in stabilizing global oil markets,” he said.

“We plan to make joint investments with Aramco in Russia… Plans which we had remain.”

RDIF has partnerships with Saudi Arabia’s two sovereign wealth funds, the PIF and the Saudi Arabian General Investment Authority (SAGIA).

Novak said on Wednesday that OPEC and non-OPEC countries would continue to coordinate on output.

“This is very important for the market to maintain its stability,” Novak said.

Aramco, the world’s top oil producing company, is preparing for an IPO of up to 5% by 2020-2021 which could be the world’s largest IPO.

The plan is a centerpiece of Vision 2030, a plan to diversify the Saudi economy away from oil being championed by Crown Prince Mohammed bin Salman.

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