The Saudi Arabian Oil Company (Aramco) is the most politically exposed entity in Saudi Arabia yet almost entirely liberated from the power plays of Riyadh’s preeminent politicians. The House of Saud relies upon Aramco because it remains the biggest revenue generator for themselves and the state as a whole. Consequently, this has birthed a reluctance to interfere in a machinery that works best when left alone, fostering a culture of corporate integrity and merit-based decision making.
Talks of an Aramco IPO loom large on the minds of many internal stakeholders and is therefore unlikely to pass without a major internal struggle.
- Aramco is a finely tuned corporate entity – contrary to how much of the Saudi state’s other institutions are run. Where large companies in the construction sector have faltered, and other successful firms rely on outside support, Aramco remains a beacon of stability enshrined within the Saudi fabric.
- The company’s strategic importance has placed it above power plays, exempting it from some of the instability brought on by bouts of acute politicisation. Kings and Crown Princes steer clear of overt manipulation with regards to Aramco, as it best serves them when left alone.
- This signals hope for Saudi’s evolving investment environment as it can be a blueprint for success. Replicate the Aramco-dynamic that exists between the government vis-à-vis other strategic entities, and the economy will have a chance to function efficiently.