Historic energy sector liberalization Partial privatization of energy sector assets could represent one of the cornerstones of the ambitious medium-term diversification strategy, and, if confirmed, serve as a highly visible and historic milestone. Such privatizations could ease key macro concerns regarding unsustainable debt accumulation and Fx reserves drawdown. We believe it would also confirm the government’s macro reform credentials, its preparedness for a prolonged period of low oil prices and likely signal no near-term energy policy capitulation. The NTP suggestion of a flat production capacity through 2020 suggests less aggressive market share strategy, in our view. Privatization of energy sector could start by 2018 In a recent interview with Bloomberg, Saudi Deputy Crown Prince Mohammed bin Salman outlined an array of measures the Saudi government could introduce to help diversify the economy, reduce its reliance on the hydrocarbon industry and ultimately support medium-term fiscal consolidation in a low oil price environment. Amongst these measures, the Deputy Crown Prince included a potential Initial Public Offering (IPO) of Saudi Aramco (at the parent level, and including various subsidiaries). With close to 250bn bbls of oil reserves, more than 10mn bbls per day of production and the world’s Ath largest gas reserves, Saudi Aramco is the leader in hydrocarbon access among state owned, private and public Oil & Gas (O&G) companies alike. Saudi Aramco is the world’s largest Oil & Gas Company by production and arguably the Kingdom’s most important asset. Specifically, he outlined a plan that would see “less than 5%” of the company being sold to investors on the Saudi stock exchange no later than 2018 (but potentially as soon as 2017). Furthermore, he indicated the Kingdom is seeking to transform Aramco into an “energy-industrial company”. The high profile stake sale would provide a highly visible anchor to diversification efforts and capitalize its newly rest