Saudi Arabia Prepares for Post-Oil Era with $2 Trillon Public Investment Fund

There have been a number of readers here who have commented on the news story about Saudi Arabia launching a $2 trillion investment fund to help the country prepare for a post-oil era. I thought I’d start a new thread on the subject.

Deputy Crown Prince Mohammed bin Salman told John Mickelthwait of Bloomberg News in a 5-hour interview that the country was preparing an investment fund that would help to transform the state-owned Aramco oil company into an ‘industrial conglomerate’. Shares in the fund would be publicly traded with an IPO planned as early as next year. The fund will become the largest sovereign wealth investment fund on earth with the capability of buying stakes in companies worldwide. The plan is to diversify into other fields and use the return on investments to fund government operations.

The reason for this transformation of Aramco is based on collapse of oil revenues, upon which Saudi Arabia has relied for so many decades. The country is undergoing a vast belt-tightening process with generous subsidies for gasoline and electricity being cut and wasteful spending being cut out the state budgets.

Mickelthwait says the crown prince has an obsession on moving the Saudi economy away from oil to something new. When asked about the level of desperation in the company regarding the collapse of oil wealth, Mickelthwait said the Saudis want to expand their role in the energy markets by becoming the world’s biggest refiner of oil and become a huge industrial energy company — as well as expanding into other fields such as mining and petrochemicals.

Are the Saudis aware of the possible implications of LENR hitting the marketplace? There’s nothing that has been reported publicly about this, so we can’t say for certain. We do know that Industrial Heat has the license to sell and possibly manufacture E-Cats in Saudi Arabia and the Emirates — so it would not be surprising at all if they had already started laying the groundwork for commercialization of LENR there.

The article and interview with the author can be read at Bloomberg News here: http://www.bloomberg.com/news/articles/2016-04-01/saudi-arabia-plans-2-trillion-megafund-to-dwarf-all-its-rivals

  • Frechette

    The only thing the Saudis have done is offer to build 200 new mosques in Germany. Naturally they will be staffed and led by recruiters for ISIS.

    Merkel must go. She is wrecking the country and is partially responsible for the attacks in Paris and Brussels.

    I’m with you. I wouldn’t invest a penny in any of those countries in the ME.

  • DrD

    Jet powered cars then?
    I suppose it depends on the efficiency of the “thrust” compared to electric amongst other factors, like “controlability”, “convenience”, “weight”, “safety” etc.

    Dear Andrea,
    has your ecat-q ever produced (apart from heath, electricity and light) some kind of THRUST?
    Best regards
    Giovanni

    Andrea Rossi
    April 4, 2016 at 5:57 AM
    Giovanni:

    Yes.

    Warm Regards,
    A.R.

  • https://www.facebook.com/app_scoped_user_id/100002656573372/ Ian Walker

    Hi all

    One aspect to be keenly aware of is LENR’s effect on the oil field derivatives market.

    By 2013 there were those in the markets who were taking heed and were already warning about the financial risks of Fracking companies:
    “…One banker who arranges hedging contract for independents spells out the implications bluntly: “If the smaller guys can’t hedge above their cost of production, they’re dead. They wouldn’t be able borrow so they wouldn’t be able to drill…”

    http://www.ft.com/cms/s/0/ac95bffa-f911-11e2-86e1-00144feabdc0.html#axzz44lRf0WSG
    Follow the link to see the article in full.

    Owning derivatives based on Fracking company loans should be approached with all due diligence.

    Kind Regards walker

  • LION
  • Mats002

    Agree! The large move away from coal and oil is driven by the political determination to lower CO2. LENR is known in just a small community and furthermore: within this community there is a scale of doubt for if LENR+ really exist or not. We are still waiting for the ERV report.

    It is good news anyway.

  • we want LENR Fusione Fredda

    Sifferkoll: http://www.sifferkoll.se/sifferkoll/author/admin/ is Leonardo Corp planning a LENR IPO? ABB seems to be the robotics provider of choice…

  • Brokeeper

    Headlines like this just released: “Crude plunges 4%, as Saudis resist output freeze unless Iran joins deal” have been posted for the past year. It appears the Saudis know their oil based empire will be eventually ‘liquidated’ not only by popular green demand but also backed by a required viable superior cheaper energy replacement. They know they must dump their oil reserves as quick as possible to maximize their revenues. It is interesting crude oil dropped over three points this week.

    • Zephir

      The irony is, much smaller Norway has already seven trillions dollars in its petrol fund collected. The Saudis just managed to spend their oil dollars for food, expensive cars and camel races.

      https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway

      • Pekka Janhunen

        0.7 trillion dollars, not seven.

        • Bedroom_eyes

          Actually its 0,88 trillion $.
          And rising.

      • Frechette

        They also have to pay off the Plebians to reduce the danger of domestic revolution.

    • nietsnie

      And I predict that it will fall further as the super tankers, that last vast class of storage facility that has not already been filled to the brim, are used up. After that, it doesn’t matter how cheap the prices get – no-one will be able to buy any more than has already recently been made room for by the current demand because they won’t have anywhere to put it. And the world is currently producing more than that.

  • PD

    Saudi oil will be worthless within a few years. LENR might help the desert bloom using desalinated water. Perhaps the Saudi’s can use the last of the oil wealth to transform the kingdom to an agricultural economy!!!

    • https://www.facebook.com/app_scoped_user_id/100002656573372/ Ian Walker

      Hi all

      This is something I have looked at in detail and wrote several reports on.

      Oil prices dropped in 2014 due to LENR exactly as I and Sifferkoll predicted back in 2012/2013.

      However the supply and demand curves just means Saudi Arabia is moving to the logical position of dropping price to kill of competition and replacing low volume high margins with high volume low margin. Net profit for Saudi Arabia remains the same, they just take their high cost competitors share of the market instead. The other low cost producers Iran and Russia are doing exactly the same.

      Who will loose out?

      The Frackers, they will go bust, and anyone stupid enough to own their loans or financial products derived from their loans, oil field derivatives.

      Big oil is already set up to buy up these, when they go bust, minus the loans, with the money it got from selling off its oil fields starting back in 2011, it still has the cash in its new banking arm.

      The higher cost oil producers, why do you think Shell sold their oil fields in Africa and South East Asia, and BP sold their North Sea oil field back to George Osborne? And the rest besides. See the link I wrote elsewhere in this thread.

      Is Saudi Arabia going to die out with the End of the Fossil Fuel Age?

      Contrary to what people say, Saudi Arabia is not totally dependent on oil. In fact much of its money it made from oil is invested in Europe and the US. They own most of the distribution hubs and malls in the US and Europe, I worked for one of the companies that did this, the amounts of money involved would stun you, if your town had a recent renovation look into who paid for it. When you look into the ownership of supposedly very western sounding companies it is amazing how many are in fact owned by Saudi Arabian funds.

      This sovereign wealth fund makes some of that clear, but the fund is just part of what Saudi Arabia owns.

      Oil will still have a market in precursor chemicals and lubricants and the adoption of LENR will be slow if oil prices remain low. I am sure that desperate companies being killed off by LENR will further gum up the wheels with lobbying for laws to slow LENR adoption down, based on rumours and fears.

      Saudi Arabia also now plans to vertically integrate into increasing its refinery business, probably LENR powered, giving them an advantage over older refineries in Europe and the US.

      Kind Regards walker

    • cashmemorz

      Some will use LENR to extract oil cheaply. Another hedge for the future.

  • Heath

    This is just the start of something rapidly coming.

    http://futurism.com/dutch-parliament-approves-ban-gas-diesel-cars-2035/

    • Zephir

      We are also converging to global nuclear war fast, so that our time for restructuring of energetics is nearing to end..

      http://yournewswire.com/china-orders-attack-subs-to-us-west-coast/

      • Heath

        The possibly is warranted, but it seems all are on board. When Saudi Arabia makes a move like this, it says something because we all knew they would be the final straw. They would have so much to lose and wind and solar is not making them squeamish. We are on the burning edge of an energy revolution.

    • Frechette

      If a bunch of green Dutch Parliamentarians think they will save the environment by banning ICE vehicles and replacing them with lithium ion battery electrics they should think again. These batteries may be worse than the disease as far as the environmental impact is concerned.

      http://phys.org/news/2016-02-lithium-battery-catalyst-key-soil.html

      • EEStorFanFibb

        maybe we should compare the total harm caused by both EVs and gasomobiles and see which wins, beyond just soil microbes.

        • Frechette

          Maybe you should think again. A new battery technology based on sodium instead of lithium might be a better choice. Fuel Cells using hydrogen produced by an e-cat power plant might also get around the problem.

  • Mike403

    About ‘This Space’ that I keep saying needs watching! …

    • artefact

      (OT)
      I watched “This Space” and I love it 🙂
      _ww.youtube.com/watch?v=HAqhftdWxi4
      (change _ to w)

  • William D. Fleming

    Other governments should do the same IMO.

  • https://www.facebook.com/app_scoped_user_id/100002656573372/ Ian Walker

    Hi all

    We have been pointing this out for some years now:
    http://www.sifferkoll.se/sifferkoll/a-must-read-guest-post-by-ian-walker-the-end-of-the-fossil-fuel-age/

    In all honesty I think they are just preparing for the ERV’s effects.

    Kind Regards walker

  • Nixter

    It always seemed odd to me, the idea that any country lucky enough to have large hydrocarbon resources, suddenly and automatically gains “Wealthy” (or well-to-do) status. In a fairer world, those being able to invent, produce, and market superior ideas should become prosperous, rather than those with simple. unthinking good luck.

    • William D. Fleming

      I just checked my birth certificate/contract. Nothing on there about “fair”.

      • Nixter

        I didn’t mean to insinuate that I thought anything of the kind, but fairer outcomes are wise to aim for, even if rarely attained.

  • pg

    Hi people, my name is Arabian prince of Saudi Arabia of some sort. I want to sell some things that will not be worth anything in 20 years. But I need you to pay as much as if then goods are of any interest to anyone in 20 years as they are now. See you in London!!!!

  • MasterBlaster7

    I have a 2 trillion dollar mega fund too….but like the Saudis, I’m not sure how to fill it.

  • http://www.lenrnews.eu/lenr-summary-for-policy-makers/ AlainCo

    Getting away from oil is also the obsession of Putin.
    It is rational as oil is a trap for economic development.
    money is too easy, and worst of all, too centralized, leading to corruption and laziness.

    Putin efforts to develop non-oil economy were not so successful, until the anti-russian sanction which helped to relocalized some consumption.

    Let us be optimistic, and guess that without oil, all Arabian, the land of the indefatigable and independent bedouin, the land of traders, leader of the scientific world for fundreds of years, will get back to it’s natural state of economic variety, rich exchanges, and open minds.

    Let us hope that the strong Russian spirit of indefatigable farmers, travelers, enduring among the worst climates on earth, freed from oil and Soviet and tsarist centralization, will invent a new economy on their land.
    Organic food, extreme tourism, industrial constructions, space port, fine cooking, maye fuel the redevelopment of this rich culture.

    Let us hope too that USA, and Canada, will rediscover their pioneer spirit, like EU will discover it’s long tradition from farmland to heavy industry…

  • LilyLover

    Action without justification projects power for the politicians.
    Rational action with suppressed reasoning mystifies and glorifies them in the long run. ‘Cause by then, History justifies everything, should progress happen down the road.
    To have power, money and dedicated-to-die soldiers affords them the most current information. He!!, even the internet is open for those who seek.
    The Saudi’s know.
    They are openly planning for the post-oil future.
    This is almost like “Francisco Scaramanga” sending the bullet “on purpose”, and “007” taking the deliberate bait.
    This could also be their strategy of diversion through truth.
    This could also signal their confidence that they are second to none and aspirant of Norway-ish lifestyle in the middle of the desert with all their might.
    Wind of changes … Ironically, it seems as if the Saudi’s are accepting abundance faster than the “free US” – USA.
    Still doubt the Age of Aquarius?