Khalid Al Falih, Saudi Arabia’s oil minister and chairman of the country’s state energy giant, said the government will make sovereign decisions on production and capacity even after a public offering of Saudi Aramco.

Speaking to reporters on the sidelines of his first Opec meeting in Vienna, Mr Al Falih said any minority investor would be buying into the relationship between the Saudi government and the world’s largest oil producing company, reports Anjli Raval in Vienna.

“Part of this is that the government makes decisions on production and capacity,” said Mr Al Falih, who said it was up to the company to demonstrate to investors the benefits of the link.

“It’s a win win policy and strategy that the kingdom has adopted [and] Aramco has benefited from it. Investors will have to accept this reality,” he said.

The IPO of Saudi Aramco, the country’s largest cash cow and one of its biggest employers, comes as part of a broader overhaul of the kingdom’s economy led by the powerful deputy crown prince Mohammed bin Salman. He has said the IPO, which is part of an effort to diversify away from oil, could value the entity at $2 trillion.

The announcement earlier this year has whet the appetite of international bankers, investors, lawyers and consultants, but placed the global energy major under the microscope.

Mr Al Falih said the offering of less than 5 per cent of the parent company, set for 2018, would still need to go through many obstacles because of how intertwined the company is with the government.

Taxation and accounting would require “extensive rewiring”, Mr Falih said. Projects undertaken on behalf of the government rather than for the commercial entity would have to be “delineated”.

Saudi Aramco, which started off as an oil explorer and producer, has not only branched out into refining and petrochemicals, it has been called on by the state to build schools, stadiums and other state infrastructure.

Industry participants have questioned how any company so intertwined with the government could work in the interests of a minority shareholder.

Mr Falih said the public offering had multiple objectives: to showcase Saudi Aramco and make it part of the global capital markets, unleash the company’s capabilities and allow it to expand internationally.

“Another aspect is to remove this notion that Saudi Aramco is not transparent,” he said, citing the company’s international governance and accounting standards and compliance practices.

The structure of any IPO or where it will be listed are among factors that are still unclear. Proceeds and dividends from the offering, Mr Falih said, would be invested by the country’s sovereign wealth fund into non oil assets,

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