The third edition of the Future Investment Initiative (FII), organised by the Public Investment Fund of Saudi Arabia, was held in its windswept capital Riyadh. Grandly dubbed by its organisers as the “Davos in the Desert”, it is meant to break many stereotypes.

Its sprawling venue — King Abdul Aziz Conference Center at the Ritz Carlton Hotel — teeming with black suited CEOs, entrepreneurs and technology influencers contrastingly rubbing shoulders with Arab sheikhs in their sparkling white long robes — Thobe — is also meant to test many of the changes that the young crown prince, Mohammad bin Salman, has announced in the past few years in this deeply Islamic society.

Saudi Arabia got a stirring response for this event from world leaders like Prime Minister Narendra Modi, Brazilian President, Jair Bolsanaro, the King of Jordan, the US President’s son-in-law and senior advisor, Jared Kushner, besides many corporate heads of investment banks and companies, including some of whom who had stayed away last year due to journalist Jamal Khashoggi’s bizarre killing.

Many of the visitors at the summit wanted to see how fast the Saudi society was modernising after the impatient prince took over the affairs of the state. Were women really driving around alone on the roads of Riyadh? What about the religious police? Were they still zealously enforcing their version of Islamic law about how women and men conduct themselves?

There were many questions that people searched for answers in the posh interiors of the Ritz Carlton and the sunny outdoors of the capital city, but the most compelling search remained about the looming IPO of the Saudi oil company, Aramco, which is slated to be the world’s biggest public offering ever. The IPO size, which has been up for speculation could be much bigger than Alibaba’s $25 billion once the valuation of Aramco is fixed. This is expected to be between $1.75 and $2 trillion.

It was obvious that the Saudi leadership was walking on eggshells not just about the size of the IPO and when it would go public, but also the question of whether to go public at all. What had visibly exacerbated their confusion about the IPO was also the precision attack by Houthi missiles and suicide drones of their oil installations at Abqaiq and Khurais, and the difference of opinion on whether the shares of the national oil company, perhaps the most profitable in the world as an enterprise, should go to outsiders.

Smart ‘marketplace’

The mysterious sacking of the Aramco chief barely after it had picked up 20 per cent stake in Reliance Industries Ltd (RIL) for a hefty price of $15 billion, added to the overall confusion. In the smartly appointed ‘marketplace’ at the FII where many companies had put up their stalls to highlight their products and where company honchos like Reliance chief Mukesh Ambani were seen hanging out, it was possible to hear people discussing the reason behind Saudi Aramco’s boss’s unceremonious fall. Some even suggested the deal with RIL as the reason.

Perhaps emboldened by the response at the FII meet, Crown Prince Mohammad bin Salman, announced the public issue of Saudi Aramco, which would hit the market on December 11. Investment bankers like Goldman Sachs, that had stayed away from last year’s FII due to Jamal Khashoggi’s killing, are back to promoting the issue.

Saudi Aramco, to attract possible investors — other than their own rich sheikhs, some of whom are still detained on the issue of corruption in Ritz Carlton Hotel — declared $68 billion as its earnings in the first nine months of the year. These may exceed the $111 billion it made in 2018.

Countries like China are declaring how much they will invest in the Aramco IPO. A media report suggests $10 billion. RIL is also expected to invest in this public issue plus on the $500 billion NEOM city project, which the Saudis have been promoting since 2017.

Despite the hype that has been created on the Saudi Aramco IPO, doubts still remain on the security of the oil installations after the attack by Houthis from Yemen. What many people at the FII meet and outside were concerned about was whether the oil fields were safe? And whether Saudi Arabia will come to an agreement with the pugnacious Iran before the public issue hits the market?

In the early hours of September 14, the Abqaiq refinery, which is the world’s biggest, and Khurais oil field, both located in the eastern part of the country, were hit by a barrage of weaponised suicide drones and ballistic missiles. For a country that had spent $67.5 billion in buying weapons, the manner in which the drones and missiles successfully invaded a heavily protected air space and destroyed the refinery, was a body blow.

For a while these drones have been testing Saudi’s air defences and they have reached as far as the diplomatic quarter in Riyadh, but this level of sophistication was least expected. In a day the Saudi oil production plummeted by 5.7 billion barrels. Normally, Aramco produces 9.8 billion barrels/day.

Peace initiatives

Though the US was quick to blame Iran for the attack, the Saudi government, though presented evidence to suggest the same in a round about manner, was more circumspect about naming them directly. Riyadh and its young leader Crown Prince Mohammad bin Salman was cognisant of the fact that his best-laid plans to transform Saudi Arabia by 2030 would come a cropper in the event of a war with Iran. For a few months now, some peace initiatives are afoot between Iran and Saudi with different mediators. Even Pakistan Prime Minister Imran Khan has attempted some shuttle diplomacy travelling from Tehran to Riyadh with unknown results.

In the last few days, Riyadh has overseen an agreement between two factions in Yemen that strengthen its hold over the war-torn country, but isolate the Houthis. Attempts are being made to mollify them too.

The Saudi government also displayed to its investors that it has not only the diplomatic capability to restore peace at its borders, but also technical competence to rebuild its devastated refineries. In a matter of 10 days, their oil installations were back at their original capacity — a task that seemed improbable when the 18 targets were hit with precision by the drones.

However, one question that could remain unanswered even after a successful public issue of world’s biggest IPO is: Who guided the missiles to Abqaiq and Khurais and from where did they really take off?

The writer is the Editor of Hardnews Magazine He was recently in Saudi Arabia at their invitation

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