Saudi Arabia government overhaul sees oil minister removed

King Salman is planning for life beyond oil profits

Saudi Arabia's King Salmon has removed the country's veteran oil minister as part of a broad government overhaul.

Ali al-Naimi has been replaced after more than 20 years in the role by former health minister Khaled al-Falih.

Saudi Arabia, the world's largest crude exporter, unveiled major economic reforms in April, aimed at ending the country's dependence on oil.

About 70% of its revenues came from oil last year, but it has been hit hard by falling prices.

The government shake-up, announced in a royal decree, sees a number of ministries merged and others, such as the ministry of electricity and water, scrapped altogether.

A public body for entertainment is being created, and another for culture.

King Salman's son Prince Mohammad directs the country's economic policy, and Mr al-Naimi's removal is an indication that he wants tighter control over the commodity, says BBC World Service Arab Affairs editor Sebastian Usher.

Can this prince make a post-oil Saudi Arabia?

Mr al-Falih has spent more than 30 years working at state oil giant Aramco, most recently serving as chairman.

He will take charge of a new department managing energy, industry and mineral resources.

Saudi slump

Even wealthy Saudi Arabia is under pressure from tumbling oil prices, and has announced a series of economic reforms

72%

of revenues come from oil

• $98bn the budget deficit in 2015
• 80% increase in petrol prices last year in the country
• $2.5tn size of state-owned oil giant Aramco
• $2tn potential value of the sovereign wealth fund the Saudis are creating

Agencies

AP

Long years of oil profits has allowed the Saudi government to offer generous benefits and subsidies to its citizens.

But with another huge budget deficit forecast this year, last month saw the approval of wide reforms including plans to create the world's biggest sovereign wealth fund and widen the participation of women in the workforce.

Many of the changes announced by King Salman in this overhaul focus on areas were reforms have been promised.

Political difficulties lie ahead though, highlighted by the sacking of the country's water minister amid outrage over rising prices.