Saudi Arabia is considering its own Big Bang.

The world biggest crude exporter is considering selling a stake in its state-owned company, which controls more than a tenth of the global oil market.

A potential initial public offering is under review for Saudi Arabian Oil Co., also known as Aramco, Mohammed bin Salman, the kingdom’s deputy crown prince, said in an interview with The Economist. A decision will probably be taken in the next few months, he said, without giving further details.

“Personally I’m enthusiastic about this step,” Salman said. “I believe it is in the interest of the Saudi market, and it is in the interest of Aramco” by helping to promote transparency and counter corruption, he said.

Aramco could rival Apple Inc. as the world’s biggest listed company. It is solely responsible for tapping the world’s second-largest crude reserves, with production double that of its nearest rival. The company is one of the key players in balancing the oil market and its investment decisions have the potential to move crude prices and affect economies around the world.

Opening it up to investors would be the most dramatic change in the kingdom’s economic policy since it started nationalization in the 1970s, with Salman comparing his plans to Margaret Thatcher’s shakeup of the U.K. economy in the 1980s.

David Fuller's view

I suspect the great Margaret Thatcher, in her prime, would be mildly amused by this reference.  Today’s question for investors: following the shock and awe of crude oil in the $30s range, are the Saudis now modernising their economy, or are they just selling some of the crown jewels to reduce their ballooning budget deficit?

I hope it is the former because that would be good for Saudi Arabia, but I suspect the partial sale of Aramco is mainly to reduce the country’s increasing burn rate of reserves. The Saudi policy of flooding the market with oil to break US shale producers and other rival suppliers always looked like a desperate, misadvised policy which could only result in a Pyrrhic victory, as best. 

(See also Saudi Aramco’s Fire Sale, also from Bloomberg)