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tv   Saudi Aramco The Company The State  Al Jazeera  December 4, 2019 4:00am-5:01am +03

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their watching out is their arms the whole robin and top stories u.s. house democrats have released a report laying out the case for the impeachment of donald trump the president used his powers to get ukraine to help him with the 2020 election the white house has called the report a one sided sham this report chronicles a scheme by the president ited states to coerce an ally ukraine that is at war with an adversary russia into doing the pleasure of the president's political dirty work it involves a scheme in which donald trump withheld official acts
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a white house meeting as well as hundreds of millions of dollars of needed military assistance in order to compel that power to deliver to investigations that he believed would assist his reelection campaign 3 criteria as the speaker laid out to this country to move what is going to happen this week those 3. issues she laid have failed each one there's nothing to tell and there's nothing overwhelming and the only bipartisan we have vote we have had in this house is not to move forward with impeachment inquiry. hundreds or can strike explains what happens next. house intelligence committee has been giving its stamp of approval on this report and now it is now passing that report on to the judiciary committee which is significant because it is the judiciary committee that will draft articles
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of impeachment basically these are the charges that trump would face once this goes to a trial in the senate the report itself sheds very little additional light on the events that happened it's really a summary that lists the what we've found out from these public hearings over the last 2 months but what you heard the democrats do as well as republicans is they're trying to now put this all in a context that that helps their case the democrats to impeach the president the republicans to defend his contacts with ukraine as being just part of the job and that democrats are trying to tap trying to remove him from office and they're both parties are framing this in a lens communicating to the american public that it matters for the democrats they're saying that it matters to hold the president accountable via impeachment and republicans saying that it's matters because he is a julie elected president president trump and that his political adversaries the
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democrats now according to republicans are trying to take away the public mandate that sent him to office. the u.s. house of representatives has passed a bill demanding sanctions all senior chinese officials over the treatment of weaken muslims now the legislation calls on donald trump to condemn abuses against the minority group in call for the closure of detention comes in the north western region of. china says it will respond accordingly and urge the u.s. to stop the bill from becoming law saying change is a domestic issue. the 70th anniversary of nato has turned into a tense war of words the u.s. and french presidents argued on several points including nato's role in the return of i still find it has also attacked turkey of its military operation in syria protests in the belly region of eastern democratic republic of congo have left at least 5 people dead demonstrators accuse the government and un peacekeepers of
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failing to protect them against armed groups the world health organization says summers worsening measles outbreak has set back global efforts to eliminate the disease 60 people have died since the epidemic started in mid october with many of those children under the age of fall more cases are being reported every hour with more than 4000 people infected in a population of just 200000. nearly half of zimbabwe's population faces severe hunger see analysis from the united nations world food program that the u.n. is planning to more than double the number of people it helps to over 4000000 but as many as 7000000 are in need of aid because you follow those stories on our website at al-jazeera dot com back with more news in half an hour to stay with us.
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it seemed like a great idea the world's largest oil producing company pumping millions of barrels a day to become the world's largest ever traded stock on porsche can had just met the l.a. see it had been for yeah we're not looking to soft walk now both to. be asleep and over ambitious prince eager to make his mark as a reformer wanted to partially trade saudi aramco for a fellow you ation of 2 trillion dollars but the venture failed to get off the ground and the prince's vision 2030 now seems blurry. saudi aramco is almost like the basis of politics in saudi arabia they are always intrinsically tied everybody in saudi arabia in one way or another is a beneficiary saudi aramco a strong saudi arabia it needs a strong rand paul and vice versa as well the history of saudi aramco is the history of saudi arabia transforming itself from an isolated tribal society into
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a global presence. get it right you reap a windfall get it wrong and the risk is huge the whole saudi economy what's at stake they'll all be the balance be done how did you face that remains and. living. in a way they run the risk of being toppled the royal family could be running for the whole. issue is really you know is an i.p.o. best for the company and when you look at graeme coke the company you have to realize that unlike other companies. around co operated for years without ever imagining and. so they've never had to make decisions. for somebody
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maybe going to be publicly listed or we'd like to publish this here's how we need to have our finances a great here's the kind of growth that we need to be showing in our financial statements to make investors see our value. analysts have never followed around because it was never seen as a potential investment and now that's changed around for many years and had a strategy of form term growth and long term revenue because their idea was that they were making money for the benefit of the saudi state if they're going to i.p.o. then they've got a sudden they think about their quarterly reports and that may change how they invest and that may not be the best strategy for saudi arabia. the kingdom holds about 16 percent of the world's oil reserves it's the largest exporter of petroleum among opec countries and that means its economy relies heavily on oil 90
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percent of exports 87 percent of budget revenues and nearly half of g.d.p. comes from oil. towering over these numbers is the company which digs out refined and exports that oil it pumps one out of every 8 barrels of oil in the world and it's the only company which can produce a barrel of oil for less than $10.00. says it employs 65000 people but creates direct and indirect work for hundreds of thousands in the came so if it's doing so well why let it go. i think there was a strong case for the i.p.o. and there still is for the selling off a stake of saudi aramco and there are lots of reasons for it now it's been talking about diversifying its economy for years i think the specter of. climate action has finally made the saudis get serious about it and really the only way to diversify is through aramco i mean aramco is the source of revenues that saudi state needs to
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build other economic sectors even though he said his big and i to countries you know in the middle east but still if he put the police officers some day a sample of the oil will be depleted pretty exhausted so they have to thing that you know you have to be fired here and have to get the economy was kind of ironic you're going to be relying on oil to diversify away from fossil fuels so if you think about saudi risk it's 100 percent owner of this company that supplies almost 100 percent of its government budget ok if they if it sees a risk to to that company going to far off risk it's nice start diversifying that risk and passing some of that along to foreign investors is one way of doing it. concerns about radical changes in strategy put a spanner in the works for saudi aramco public listed for the 1st time in its
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history the company would have to disclose everything i think when you consider the size and scope of the opportunity there's a lot of emotion and also a lot of momentum and sometimes a momentum and emotion get rolling you may lose sight of the reality of what you had to do when it came to. affectively being now an open public company before my. vision 2030 was unveiled as a master plan for socio economic reforms as a result women can drive cinemas have begun to pop up. mohammed bin so mom's aim was to reorient the saudi economy away from oil and reassure investors that saudi arabia is stable and progressive. a lot has changed since the prince's international public relations drive the efforts to convince businessmen to feel comfortable working in the kingdom also faced
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a blow when top saudi business kingpins were put under arrest in an opaque anti corruption drug and as a cascading effect there has been flight of capital reduced foreign investment increased saudi borrowing and a halt on saudi aramco its i.p.o. . the increase in internal repression inside the kingdom you know locking up of folks inside the the ritz carlton a lot of those were heads of family businesses or large companies or big conglomerates you know that gives for investors pause. the murder of one journalist has washed away the veneer of change and quashed investor confidence oh you know it's tough going for democracy i'm asking for people to be allowed to speak for the name of. the interest of a stakeholder never get priority over the kingdom the privatization process would
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mean saudi oil reserves will be up for scrutiny and to ramp those finances will be in the public eye. you go from mining a business where you have endless resources and no oversight to one day having to register your company with the exchange and have to disclose every single number. the company's had over the last 5 to 10 years every piece of cap ex every decision that's been made every partnership every single thing you've done is now in the public purview why the move. through. these i think begin by. because. it's not only belong to the state that a government but belongs also but if you're a private company that's run so well it's painful because you have answer a lot of question but not nearly as painful as after you take people's money. those
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saudi economists who dared to raise concerns about the prince's ambitious 2030 plans are in jail now you can it doesn't. mean that you're not in that kind of couldn't you know i don't know that you had. a day before the murder prominent economist is samo samo was indicted on terrorism related charges his crime was providing analysis some of which explained that a high valuation of aramco could mean that the kingdom will not get any oil revenue for decades because all of it will go into a ramp oh controlled by shareholders. in the beginning stages you have to take anyone's money because it is just disclosing to the exchanges here's how we run our business here's why you should be comfortable listing us you then go out to raise capital. and once you're taking someone else's money they own those shares and
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you're a company for the people by the people you not a company for the management of management or the or the kingdom. and the transitions massive. that changeover from state control to a public list which began in 2017 is now shelved for years to come here rahm co-executors have also left or been moved. so that process for a company like this probably a year and a half so like a tech start up for you have a slide presentation and some hope you have a business that changes global markets for decades and decades so it's a process that will be expansive. it will be intrusive. and it will be transformative. saudi aramco places the kingdom's reserves at 261000000000 barrels of oil but that magic number with no real 3rd party audit has
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remained more or less constant for nearly 30 years since the 1980 s. there have been rising production changes in technology and no announcements of major oil discoveries in the kingdom other oil giants such as shell and exxon have revised down their reserves during this period. if on average saudi production was at 9000000 barrels a day in the last 30 years aramco has pumped out nearly 100000000000 barrels without a dent in its 261000000000 reserves and the jury's out on how much they actually have and what it's worth. looking at their reserves figures you have makes if you look closely at it you start to wonder how it can stay roughly constant from year to year when they're they're producing an export and so much oil every year disclosure of the reserves it's a top secret in saudi arabia and i think that's a significant concern on the part of aramco executives they treat their reserves
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with kid gloves they are duty is to get the most out of these reserves in the best way possible the reserve confidence war only be consistent with 3rd parties verifying the information that's got to be done through regulatory fashion that everyone's comfortable it can't just be something a company says and and hopes is the case you've got to verify. whatever other qualities god may have given the saudis he gave them a lot of wealth in the ground. that's not going to go away so we want might quibble over the over the reserves. but you know the saudis have the ability to fracking really haven't even started basically. but would the possibility of higher reserves be enough for investors to finance or impose i.p.o. probably the biggest downside is the transparency that would have resulted around
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saudi reserves saudi oil reserves that doesn't change very much from year to year and really hasn't changed much over the past couple of decades it doesn't give much insight beyond the single number you know around 260000000000 barrels if saudi aramco would have listed shares in the new york stock exchange or the london stock exchange the regulators would force saudi arabia to come clean on all of its reserves you know how much of that is proven probable or otherwise i think that's a tough sell within the kingdom within saudi aramco and within the ministry and all the way up to the head of state i don't think so do you arabia is. not trustworthy when it comes to their reserves i think their reserves that there but the capacity is another question saudi aramco has never produced 12 and a half 1000000 barrels a day and has never come within about a 1000000 barrels
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a day of that aramco says that it can reach that level of capacity after a period of about 6 months of additional investment right so it can't just twist a few valves and crank up an extra 2000000 barrels a day i can remember on one occasion. sitting in the office of the. minister petroleum who did not know that i understood arabic. when one of his hades came rushing in. and said we've got we've proved the reserves in this particular new field they found and he said well how much is it and they said $3000000000.00 barrels and he said oh it's too small cap it well that's twice the alaska reserve. if you had full access to to ramp those reserves figures and you know other inside details about its revenue streams and whatnot you
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know anybody with a smartphone could could 2nd guessed saudi minister you know right now when the when the oil minister goes to vienna to speak in public at an opec meeting and you can see him surrounded by hoards of reporters each shoving their voice recorder in his face to catch a cold snippet of what he says about you know saudi plans saudi reserves saudi oil production. you know sod it saudi market strategy the world will be as quite as dependent on the oil minister for information you know sort of on the walk the. you know the secrets of what america was going to do also you know you put those those that information out there it's out there for everyone. we should just be dynamic and responsive the reserves matter because the reserves and output give saudi arabia the regional and international clout as the largest producer in the oil producing club of nations known as opec vacation travel watching billions
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and billions and billions of dollars of industry get moved by opec. and opec being a saudi driven organization they have to be meticulous the company is so good at what it does that that also brings its leaders a certain amount of political clout when it comes to opec and when it comes to other dealings with other countries a practice not a cop out and. really wants to stir belies the oil price at the some extent in that if you need the air for baghdad i think it's going to bog then through how then we can bring the good the best of the prize but it's. not the prize that benefits are going to prove himself and the prize that also benefited the producer and consumer. history before but we're going to become a courtroom is
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a sham with everything focused on fundamentals focused on addressing good markets needs porter reliable supply is petroleum saudi arabia is the keystone opec it is the big dog it's the ringleader if you will within opec opec members maintain a little bit here and there no one has more than $1000000.00 barrels per day of spare oil production capacity than that i know but maintains that that kind of level of spare capacity. at you know as as a policy that saudi arabia saudi aramco typically maintain you know a w2w barrels 2000000 barrels a day of oil production capacity that they don't use ok so no profit oriented firm would ever do this you wouldn't invest all the billions in developing oil fields and pipelines and storage facilities and production infrastructure and then just leave it dormant saudi aramco has done it at the behest of the sad state. and
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you know it's the key aspect in the saudi u.s. partnership the ramp those ability to bring more oil production online in its willingness to cut back at times and markets are oversupplied let's go to the crux of the the u.s. and saudi strategic partnership. tony arabia if we broke with them i think your oil prices would go through the roof i've kept them down they've helped me keep them down right now we have low oil prices are relatively i'd like to see it go down even lower. billions of dollars are treated at the world's largest stock exchange it's business as usual on wall street but like other exchanges around the. world also tried to sway saudi aramco to list in new york even the us president weighed in on his preferred medium of communication but the strict requirements remained
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a deterrent for the i.p.o. which was being called the world's largest offering it would be a double whammy for mohamed been so mom to not get the 2 trillion dollars valuation and having to compromise on not listing on the world's largest stock market. where the world's largest oil producer and you don't list in the world's largest stock exchange that's definitely something i definitely better access to capital new york is terribly complicated by virtue of the 911 hangover so i thought from the beginning it was quite you know it was a nice thing to dangle before the americans but it was probably not going to come to us you know there aren't that many exchanges that can do this london and new york were the 2 main ones that that that could really handle something like this both of which have pretty stringent transparency requirements new york's more south . london was signaling that it was willing to roll back. some of its
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transparency requirements and make a special deal for aramco the princes i.p.o. hit the brakes from a lofty 2 trillion dollar valuation to uncertainty about the size of saudi reserves for litigation risks to stringent requirements from stock exchanges but the reality was different from the political statements. i think the 2 trillion dollar number 0 is significant for saudis but not significant for the rest of them are talking about a business that dwarfs almost every business in the us and p. $500.00 i would say 2 trillion dollars is a high valuation it's not unachievable when you look at what the size of it is whether it's a trillion trillion after 2 trillion. the scales all relative it's massive and so if you have a business earning $23400000000000.00 a year there's a multiple put on it. and the market's going to say well even though you're
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a trillion dollar business give or take whether you're one trillion or 3 trillion is going to be dependent on your earnings and your decline curves and your gross strategy what type of growth percent is going to put on your business it's a huge number there's no question about it whether you look at the high level we look at the low level it's huge it's a huge i.p.o. huge company and so i guess what you're asking me is how do they expect to sell it i think there's enough money out there that can cover it but if on the other hand the global economy should begin to take down would then it's going to be a hard sell they would have to lower the price putting a line in the sand is is strong and smart from your own perspective but the market's going to determine what they feel comfortable about buying. your stocking
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that's worth what someone tells you it's worth but we hope so when my have been someone announced the remco i.p.o. and he basically said we're looking for a valuation of 2 trillion dollars that's the largest valuation of all time for any company and that's of those for the whole company they were never talking about selling any more than 5 percent so it seems like they're looking to raise $100000000000.00 which is a large amount but not that much so the quip but the question is really is a ram co valued at 2 trillion dollars what are their oil reserves which is really tends to be the bulk of what makes up an oil company valuation now we're also has a lot of other assets around the world not oil not upstream oil assets but they own shares in refineries in china in south korea they own oil storage facilities in japan that they own the largest oil refinery in the united states and they also
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have a lot of research and development things going on they've also got petro chemical and oil refineries in saudi arabia so the company is worth more than what they dig out of the ground and sell but does that get us to 2 trillion dollars the answer also depends on what the price of oil is at the time of the i.p.o. and when they announced the i.p.o. we were in the midst of a very period of very low well prices so you can see i would be very hard to reach a 2 trillion dollars valuation in say 2017 when the price of oil was you know $50.00 or $55.00 a barrel. it's an indirect devaluation of the saudi economy which is reliant on a whim. so it's not just a company with a proposed 2 trillion dollar price tag. there's a major problem with valuing the company. what is it that's being offered
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some slice of the overall company. but no direct ownership of any part of it how much are the reserves after all are they understated or overstated what level of efficiency does saudi aramco have in comparison with other oil companies. where is the future market. mohamed been so months vision was to take the money from the i.p.o. to revamp the saudi public investment fund which would play a leading role in developing non oil industries but that fund has already started borrowing money instead of stacking up oil revenues the 10s of billions expected from a ram code never arrived and global banks provided their 1st ever loan of $11000000000.00 the i.p.o. it seems to be from what people say was designed to generate cash for the public
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investment fund of saudi arabia which is designed to make investments for the future not to use for the saudi budget not to use for those kind of projects but really a sovereign wealth fund to rely on you know when oil is no longer foreign commodity here you have a company which has been deliberately nontransparent it's not listed on any market it has no shareholders other than the kingdom itself to which to report in saudi arabia is not a notably free press environment and it is not a democracy and accountability is uncertain. an investigation of how foreign companies climbed africa's natural resources that russia is showing portend in the kardashian game revealing how media's officials demand cash in exchange for favors.
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confidential documents provided to al-jazeera by wiki leaks people are going to say that you committed treason i was part of the crimes and i'm not denying it our dizzier investigations the anatomy of a braai. you're watching al-jazeera of means the whole romney reminder of all top news stories u.s. house democrats have released a report laying out the case for the impeachment of donald trump it says the president used his powers to get ukraine to help him with the 2020 alexion the white house has called the report a one sided show castro has more from capitol hill the house intelligence committee has been giving its stamp of approval on this report and now it is now passing that report on to the traditional committee which is significant because it is the judiciary committee that will draft articles of impeachment
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basically these are the charges that trump would face once this goes to a trial in the senate the year's house of representatives has passed a bill demanding sanctions on senior chinese officials over the treatment of weaken muslims the legislation calls all the president trying to condemn abuses against the minority group and call for the closure of detention camps in the northwestern region challenging china says it will respond accordingly and urge the u.s. to stop the bill from becoming law saying she enjoying is a domestic issue. the 70th anniversary of nato has turned into a tense war of words the u.s. and french presidents argued on several points including nato his role and the return of i still find his lecture also attacked turkey of its military operation in syria. and protests in the very region of eastern democratic republic of congo have left at least 5 people dead demonstrators accuse the government and un peacekeepers of failing to protect them against armed groups. and the world health
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organization says the most worsening measles outbreak has set back global efforts to eliminate the disease 60 people have died since the epidemic started in mid october many of those are children under the age of 4 more cases are being reported every hour with more than 4000 people infected in a population of just 200000. they have a zimbabwe's population faces of a hunger that's the analysis from the un's world food programme the un is planning to do more than double the number of people it helps to 4000000 but as many as 7000000 are in need of aid the situation is only expected to get worse with little rain expected before the april harvest in full of those stories on our website www dot com i'm back with a news hour in half an hour do stay with us here on al-jazeera. the kingdom is home to the most important religious sites for muslims but saudi
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arabia is a real source of power is it spoil wealth and ram can convert that black gold into dollars and riyadh so. many academics experts and oil economist either refused all refrain from speaking to us as soon as they heard about aramco the kingdom's most potent economic firepower. the saudis can use oil as a weapon. opec did it in 1973. they put an embargo and what happened to the price of oil. it shot up over $100.00 a few years ago we saw oil prices tumble. created that. it was the saudis. they flooded the market. why they wanted to put shallow oil out of business well it backfired.
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the partnership between the u.s. and saudi arabia rests on linked interests many of which have either disappeared or are now problematic they basic bargain of. preferred access to energy in return for security protection but the united states is now the swing producer internationally for oil given fracking and we are an energy exporter not dependent on the gulf the support that the saudis provided by making american foreign policy how loud. acceptable to most things. now the muslim world is so divided the united states is there islamophobia that bargain is gone. saudi arabia also controls of vast media empire for decades it's been tens of millions of dollars to lobby cultural institutions think tanks universities even government all to improve the kingdom's image that's jumped from
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$10000000.00 spent in 2016 to more than $27000000.00 today used to fuel a sophisticated saudi influence machine that money shapes policy and perceptions and it also covers up criticism of the kingdom much of this was revealed in 2015 when wiki leaks published thousands of cable exchanges between saudi diplomats posted abroad and the foreign ministry. houston texas is an oil town. it's a testament to saudi soft power and how big saudi money is securely invested in the us regardless of what saudi arabia is accused of and even a local marathon here is sponsored by a ram come but whether it's $911.00 or the murder of the saudi journalist jamal khashoggi it all continues to cast
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a shadow over the kingdom's image abroad. in terms of jasta which is the law that was passed basically saying that for the say can sue the saudi government for the role and $911.00. that has been put forward as a reason not to list on the new york stock exchange. i'm not a lawyer but it would not be a real concern at all evidence that at least that's available that the u.s. government has presented an declassified is not significant enough to probably convict or to get. a ruling you know to be able to sue the saudi them so there's that but say it was. then the question is ok so what kind of assets can you go after and if you're saying that aramco is an asset of the saudi government and therefore should pay well there's already a lot of aramco investment in the united states that they can go after they can go
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after moti by the largest refinery they have research centers all over there is around headquarters services company in in america i think that that's a convenient excuse to give but if they wanted to list on the new york stock exchange it's not really a significant barrier. motif is the largest refinery in the united states which goes through a whopping 6 100000 barrels a day it's more than 2000 employees work near the gulf of mexico but this behemoth facility isn't u.s. it's a subsidiary of the centerpiece of saudi crown prince mohammed bin vision 2030 he wants to expand the petro chemicals business instead of the kingdom's heavy reliance on oil sales motif is so influential in port arthur that bill tiva security sent a policeman to stop us from filming they even called the police to hold us until the very question why journalists were filming their facilities.
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despite tight control over media and any opinion which doesn't fall in line with that of the kingdom. efforts to privatized had been a hard sell at home. with very little accountability of the ruling family radical changes are viewed with suspicion by many ordinary saudis. one of the major objections by people in the kingdom was their fear that the money would go into the pockets of the royal family rather than be used in a transparent way to provide government services to the people in other words waste fraud and mismanagement are a concern on the part of the public they're also concerned by foreigners i think the conference is trying to create an environment conducive to foreign investment but events things keep happening questions keep getting raised that make that
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difficult. geo political power is to is the exclusive access to information about saudi reserves they hold that information very close and they let it out and in dribs and drabs it's almost like the strategic ambiguity around the israeli nuclear weapons capability they release what they choose to release when they choose to release it that's a source of power very similar with the oil reserves in saudi arabia. this is not the 1st time reforms have been promised in saudi arabia or the 1st time when those promises have been left up by western powers and lauded by the media. since the 1950 s. the new york times which likes to be called the newspaper of record has given similar coverage to saudi kings and princes the media has given them titles such as trailblazers and performers similar to the current crown prince even the glitzy 2030 roadmap hints that promises. well the vision itself is hardly
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new this was largely drawn out of their consultants mckinsey in particular. and they were able to do that quickly because the ministry of planning in saudi arabia had all these ideas. there to be gathered up so the vision isn't new the drive for change in the kingdom transformative drive is also not new in many ways i had been so many resembles his grandfather. closes of different methods of blows these united kingdom with tribal marriages bewildering number of marriages and divorces brought different groups in the society and a into his family he conducted a war in the saudi south. which is on a sea of which took land from yemen and made it definitively part of saudi arabia
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he suppressed religious uprisings there are many similarities one could say and it worked whether the current dr will work or not is unknown and certainly not the 1st time claims of reform have been made in saudi arabia for example king feisal when he became king he made a lot of very important changes and reforms in saudi arabia that before that the government had been spending very recklessly and carelessly under king his brother king so i would it was reported actually that he would carry around in his pocket of the budget and whenever he would see a minister say in the halls or something he would question them who say how are you spending this money what are you doing with it so this is not the 1st time that the reforms have been tried probably every previous king in saudi arabia has announced it to some extent and there have been one of the key aspects i think that a lot of the reform plans always include megaprojects. and in my mind those mega
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projects never really pan out and so those that's always something to be wary of you can hold up the ramp i.p.o. is the key example of that but there were lots of other privatisations that would have really helped kind of. move saudi arabia's economy from various state status based shoe of much more diverse and vibrant private economies so for example they wanted to sell parts of the airlines of of different national companies and it really almost seems like the reverse is happening that the state is actually more involved in the economy as opposed to less involved and that i think is probably not a good sign for developing a diverse and vibrant private economy but at the same time there are ships in whole troll and social expectations that have to occur in saudi arabia and so those changes i think a setting a year of 2030 years probably very. ambitious i think the saudis realize that
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the time has come that they must change the way they run the economy where they do business otherwise what would happen in. iraq look what happened when i read what happened with libya it's not too far fetched to think that that can happen with saudi arabia. yemen or they just want to know and i want to say yeah i'm a new york guy that could tell you look the work done to them you know overall is a whole city deal below me and the leadership that's just not spotless but there will not be this one with him hug the she kind of the time of the man i know that she come to help you know have a she can be dust or maybe you just. need to you know cuban help.
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the ongoing mourning in yemen is not just creating global pressure but also a strain on the saudi economy in addition tens of thousands of foreign workers have been expelled from saudi arabia. the government's reduction in subsidies for fuel and utilities has become a burden it's had to borrow aggressively to plug the budget deficit. well the budgetary crisis is not new i did have a conversation with the late then crown prince abdullah later king abdullah who made a real effort in the late ninety's had to institute a tax system other than that. and the conversation went like this i said to him you know i think you have a problem here because for example in the united states if i take
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a section of desert that's a part of nevada and i either invest my own money or i borrow money from a bank and i build an industrial estate a park and a related community and i don't ask the government for anything the government still has to come up with all sorts of services police education and waste water management road maintenance even if i build the roads initially and so forth. and the same is true in saudi arabia if except even more so because at that time at least saudi arabia was heavily subsidizing electricity and water and other things that people needed so i said you know the difference is that in the vada every cent will come back in the form of increased government revenue. and so that the even the debt will be replaced by a stream of revenue that makes the government whole it enables. higher level of
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service whereas in saudi arabia not on how it comes back basically you have a sister and i said in which private prosperity impoverish is the government the opposite of normal economics so i've said to people. i'll give you a real nigel if they're real parliament and a role in allocating tax resources but in order to do that you've got to pay taxes and he said i came very close to getting a consensus on this in the end i failed the merchants particularly in the western province would not agree so it's difficult to rationalize a big investments in a country that's already a hard sell for investors anyway because of you know the visa requirements and red tape and you know lifestyle issues in saudi arabia a lot of a lot of foreigners it's not a you know considered
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a great destination for you know 2nd homeowners or for. foreigners who are looking to move their families and put their kids in the local schools you know they would go to dubai or bought her a new or abu dhabi or doha to go to the region. so it's you know sat here has never been a real easy sell for foreign investment for the size of its economy f.b.i. flows there aren't proportionally as big as they are for some of the more open economies around the region. perhaps the biggest challenge to the saudi economy comes from the wave of change in the way the country is being run through. mohamad been so moms pursued a vision 2030 has upset the traditional order in 2015 when. things on my own ascended the throne in short order within a year old power was essentially transferred into the hands of his favorite son from a dance of mine this destroyed the consultative tradition. within the royal family
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and more broadly in the kingdom here you have a young man who has great ambition drive imagination. determined to change things impatient and not willing to wait for consultation so a lot of egos have been bruised a lot of interests have been shaken many people have lodged objections to this fundamental change in the constitutional order in saudi arabia this is before you get to things like. the added corruption drive which. exacted huge amounts of money from the wealthy elite in the kingdom. kings on mon will be the last king of his generation it had always passed from brother to brother to brother and it's clear even though there are still some living brothers or signs of up to ozzy's it is been decided that samana will be the last of that generation. the next generation there are a lot of princes there and
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a lot of them have a great deal of control and in certain segments of the economy and and of saudi society and there's always been kind of a balancing act that went on between these different segments of the royal family there been a lot of tensions produced basically traditionally in saudi arabia and in gulf arab societies general lady. of the kang or the or the i mean here the leader has the same responsibilities as the sheriff in a tribe there's really 2 responsibilities one is to. ensure that decisions are taken by consensus after consultation he proclaims a consensus does not. make a decision then impose it 2nd responsibility is to ensure that the less fortunate the poor share of the wealth so it's
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a the government or the this case the leader must distribute columns charity to the needy the saudi state is built on these principles the 1st one has been that the compromise as power has been gathered into one man surrounds or perhaps to. the proud prince and his father the members of the family the ruling family who were previously consulted i feel excluded in many cases from the decision making process they would have all be and had to agree together on things almost like different shareholders and it does appear that that process is changing i would be cautious of of saying well it's now different everything is different now it's a one man show that may be the image that they'd like to present to everyone but that doesn't mean that all of the other sources of power have necessarily been eliminated. in fact you know if enough brothers decide that the
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harvest online is not the right way that that couldn't be changed i think for it's too early to write off that process and to say that he has fully consolidated power . to study the hype and waste all that time that is what was said to be good at 533000000 dollars 525000000 dollars there's been a 3 year period from lucrative military contracts to support for each other's wars there is a special relationship between the us president the saudi king and mohamed been some on the list right right there but that special relationship has been under stress like and i love the king king solomon but i said king. we're protecting you you might not be there for 2 weeks without us you have to pay for your village and . we filmed this
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during the period when the saudi government was officially denying that its agents murdered journalist jamal khashoggi the government later confessed to the killing of the saudi consulate in istanbul and admitted it was a premeditated murder. a lot of fingers are pointed at the crown prince for allegedly ordering the killing in turkey but the u.s. president still has unwavering support for muhammad bin salma i don't know if anyone's going to be able to conclude that the crown prince there but i will say this i don't know i don't know but whether he did or whether he did and he denies it very manipulative his father denies it became very adamantly. the case remains open regardless of saudi denials and criminal sentences it risks the prince's grip on power for an investment vision to. 2030 am aramco spy p.r.
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. despite several attempts and its subsidiaries did not respond to our request for interviews part of. the killing of the saudi journalist that has put them in the spotlight and if they come forward and tell the whole truth of what happened. then that will be a sign that they're really ready for change if not. they may be faced with harsh. economic sanctions. and if that's the case the market. seems to be saying well saudi arabia's economy is going to fall off a cliff on the foreign policy front the kingdom has flirted into a series of adventures none of which have turned out well it is stuck with
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a garrison along with others from the go gulf cooperation council in bahrain. where unrest continues and shows no sign of abating. it is it has become. really battered by syria which has been a transformative situation in the middle east brought the russians back in as the major foreign player for example. saudi arabia is relationships with turkey have been badly damaged. by this it has said seen fit to divide itself from qatar and and conduct a blockade which again shows no sign of going away and rich essentially divides the gulf cooperation council irreparably and finally of course it is
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a gauged in a war in yemen with no clear objective that is feasible and no more terminations strategy. saudi aramco said failure to launch and to young leaders stumble from one crisis to another are directly linked there is an urgency to rush into things but also a lack of experience. that is really like planning for the growth of a nation. not the. and the growth of the nation takes a lot more planning. they've pulled back. because they recognize that this is a transformational moment it's going to take. a lot more time and energy to get into the realm of the public markets if they ever get comfortable they may never be comfortable with i know there are elements within so decided who don't want to see
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that change and they feel that this is too much and too soon and too big and the pushback from the government has been they need to be dragged kicking and screaming into these changes and that's the way it's going to be i see that as a much bigger backlash than even the religious or conservative people is really unemployment and saudis not taking jobs or on they've made a big push to get rid of foreign labor in saudi arabia but the problem is that if you're not replacing that with saudi labor then you're not going to have. an economy if people aren't taking jobs and unemployment remains high despite there being then you've got a significant problem and i see that really as the biggest threat to the changes they can make all the decrees they want but if people don't work people aren't working and making money and they don't see that as a valuable part of their lives that and they're not going to pacify people with
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movie theaters. it's all to me a function of how fast they want to get to their end goal which none of us know that the more they're in the street is obviously the oil but they need to be more open and that's to keep saudi arabia has to make it on its own for an extended never do and so far it seems to be having difficulty right now there's no substitute for oil so it's not going to go away in the short term you know the writing is on the wall and the saudis have have read it. the saudi crown prince is adamant that he is the whole bonjour of change he may have the desire but what he can actually achieve with me the big question.
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we got some quotes whether making its way toward say northeastern corner of the u.s. following on from a recent wintry spell still if you went to the florist there for the the coming hours you can see how a drawing in a northerly wind behind this area of low pressure temperatures going to be well down still but at least we're looking at with a wet crisp sunshine over the next couple of days there will still be
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a few snow flurries upstate new york for example pennsylvania could see some wintry weather still in the mix but it is in the process of quality down for the southeast cold enough that they say it's just 9 degrees celsius also some snow too on the other side of the country i put towards say either the rockies parts of fun northern california could see some snow some heavy rain doubts was the south l.a. looking at some very heavy rain possibility of some flooding here over the next day some of a wintry mix up towards the northwest and cold with some rain sleet and snow pushing through b.c. quoting down a little as we go on into thursday central areas seeing one of 2 pokus of snow 4 celsius there for dems and then we go clear skies into the northeast temperatures in new york at around 6 celsius in most of the ice and lines there for d.c. down into the car still this area of cloud in the rain across the great surrounds into the western side of the caribbean it lingus half a sometime still wet on this day.
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i really felt liberated as a journalist module getting to the truth as i was that's what this job. this is al jazeera. and welcome to the al-jazeera news our life my headquarters here in doha coming up in the next 60 minutes a damning impeachment report accuses donald trump of soliciting help from ukraine's president to boost his chances of reelection. this is about whether the american people have a right to expect that the president is going to act in their interests with their security in mind and not for some illicit personal or pull.

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