Investors worldwide size up palace intrigue in oil-rich kingdom

Just two weeks ago, Saudi Arabia gathered the global business elite in Riyadh, promising a new age for the oil-rich kingdom as it sought to court overseas money and investment.

But late on Saturday, the kingdom showed its old face of palace intrigue, with the arrests of four ministers and 11 princes, including Prince Alwaleed bin Talal, the billionaire who is one of the country’s most public investment figures.

International investors and business executives are now trying to interpret the power play. To some, the arrests portend a quick consolidation of authority under the young, reformist Crown Prince Mohammed bin Salman, who wants to vault the country to modernity. In that way, the arrests are viewed as a sign that the crown prince will be able to push through his ambitious economic agenda, including selling off shares in the giant state oil company.

To others, the arrests point to the potential for political tumult that could lead to the collapse of his entire project. Overseas investors have been reluctant to plow money into a country where the rule of law is weak and the ruling family trumps all.

“It might have good consequences for stability maybe, or just the opposite,” said Dragan Vuckovic, president of Mediterranean International, an oil service company that does business across the Middle East and North Africa. “It’s questionable what is happening behind the scenes, it is a very secretive society.”

The arrests came at an awkward time for the kingdom.

Prince Mohammed recently invited more than 3,500 investors, corporate chief executives, and leaders of nongovernmental organizations to Riyadh for a three-day conference intended to promote future business opportunities. Officials promised that the public offering of the state oil company, Saudi Aramco, would go forward and that the sovereign wealth fund would soon rank among the richest in the world with more than $400 billion in assets by 2020. They pledged to build a utopian megacity on a stretch of deserted land that would attract capital and talent from all over the world.

©2017 The New York Times News Service