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Fahd bin Abdul Aziz
Sultan Bin Abdul Aziz
Naef Bin Abdul Aziz
Salman Bin Abdul Aziz
Ahmad Bin Abdul Aziz
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| Almost all deals involving members of the royal
family are simple contractual arrangements between the ministries and
privately owned (or, perhaps more aptly, "princely" owned)
companies. A direct cut from Saudi oil revenues is the special and highly
secret purview of only a very select number of princes, whose deals rarely
come to light. The Wall Street Journal reported that in November
1980 Saudi Arabia ordered one of the four American oil companies
that formed the old ARAMCO consortium to begin selling 140,000 barrels a
day of Saudi crude to a mysterious buyer in Japan called "Petromonde."
The official agreement with Saudi Arabia called for the Japanese firm to
pay $32 a barrel, but word soon leaked out from Japan that Petromonde
would resell the oil to Japanese refiners for $34.63 per barrel. The extra
$2.63 a barrel represented a "commission" that would net the
dealer $368,200 a day, or $11 million a month. International oil industry
investigators soon learned that Petromonde was not a Japanese company at
all but a London-based concern with the same London telephone and telex
numbers as Al Bilad. Discovered, embarrassed Saudi officials canceled yet
another of Mohammed ibn Fahd's deals.
The Petromonde case came as close as anything to documenting the
payment of large commissions to members of the Saudi royal family to
obtain Saudi oil during the days of oil shortages Known as "princely
oil", it provided staggering amounts of money to selected members of
the House of Saud and represents one of the components of the glue that
holds the royal family together. Prominent princes expect a big share of
the kingdom's wealth, which goes into their private fortunes and supports
an intricate system of private patronage. Among the major beneficiaries of
the system was the ubiquitous Prince Mohammed ibn Abdul Aziz (d. 1983),
the older brother of kings Khalid and Fahd. When he renounced his place in
the succession to the throne, Mohammed is said to have been allowed to
allocate a share of Petromin's oil* in return for under-the-table
commissions from his agents, who then contacted buyers. One deal turned
down by an American company could have netted the prince $1.2 million
a day.
The sacrosanct oil resources of Saudi Arabia are better
protected from the financial manipulations of the royal family than other
areas of the Saudi economy. While oil shortages lasted, only the highest
ranking members of the family ever had access to oil deals, and then only
those involving a small percentage of total production. During the boom,
there were too many other less politically sensitive ways for people of
privilege to make money. Besides land, joint ventures, and government
contracts, there was income from capital invested abroad and an inside
track on currency manipulations from the Saudi Arabian Monetary Agency,
which controlled the value of the Saudi Riyal. |
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