Saudi’s are stuck for cash. Go figure. Financial media recently in test marketed a conceptually IPO. Fee addicts frequently referred to as investment bankers hyper-salivated at t he thought. Here are a few reasons why investment would be a very very bad idea.
- You would only be a minority shareholder with no shareholder power. the Saudi Royal family will continue to operate the asset as a personal holding. Investor relations, investor communications, governance, shareholder rights are western concepts not Saudi belief’s.
- This Shia/Sunni conflict is an ancient hatred thathat will not be peacefully resolved in our grandchildren’s lifetimes. The Saudi oil fields are populated by Shia’s more beholden to Iran and Sunni’s which run Riyadh and the Saudi Peninsula. This is called geo-political risk. Oil has enough geo-political risk why invest in ground zero of the risk spectrum.
- Iran wants to kill the House of Saud and is prepared to slaughter en masse. Even their own Shia minority would be just considered as glorious martyrs. Iran would not consider for a minute any expropriation costs. They have a fanatical element in their Revolutionary Guard. They’ll just take it and laugh as you kiss their ass.
- Saudi’s engineering reserves are a big secret and will not be disclosed. You cannot rightfully invest in something unless you think you’re know the correct value. The Saudi’s will not tell you and one day they will be dry.
- Too bad if you are a buy low investor; oil is low and it otherwise should be a good deal.
George Gutowski writes from a caveat emptor perspective.