London (CNN Business) Saudi Arabia has a new oil minister.
The world's largest oil exporter replaced energy minister Khalid al-Falih with Prince Abdulaziz bin Salman bin Abdulaziz al-Saud, state media said Sunday.
Al-Falih was appointed oil minister in May 2016. He was the architect of a pact between the Organization of the Petroleum Exporting Countries (OPEC) and some other oil producers, including Russia, that was designed to reduce oil supply to boost prices. The agreement has lasted for nearly three years but has failed to drive prices back to the $80 a barrel level Saudi Arabia wanted.
"I think it is a positive notion to the market that a person like Prince Abdulaziz is taking [the oil ministry] with all of that history of OPEC that he has," said Suhail Al Mazrouei, minister of energy for the United Arab Emirates.
Prince Abdulaziz is Crown Prince Mohammed bin Salman's half brother and has been a member of Saudi Arabia's delegation to OPEC for many years. He becomes the first member of the royal family to serve as oil minister.
His appointment breaks with long standing tradition and follows the removal of al-Falih as chairman of the giant state-owned oil company Saudi Aramco just last week.
The leadership changes are the latest in a string of developments to prepare Aramco to go public in what could be the world's biggest IPO. Aramco attracted huge interest with its debut international bond sale in April. It has conducted an independent audit of the kingdom's oil reserves and has started publishing earnings.
Al-Falih had "never been enthusiastic about an IPO for Aramco," a senior OPEC source told CNN Business last week.
When he was replaced at Aramco, Al-Falih took to Twitter to congratulate the new chairman, Yasir Al Rumayyan, saying his appointment came "as an important step to prepare the company for the public offering."
Bin Salman first announced the partial IPO of Aramco in 2016. It was originally planned for 2018 but never materialized because of concerns about potential litigation in the United States and skepticism among investors over the Crown Prince's ambitions for a deal that valued Aramco at $2 trillion.
The IPO is central to Bin Salman's Vision 2030 to diversify Saudi Arabia's economy.
Plans for the partial privatization were revived following positive investor reaction to the Aramco bond sale in April, the Wall Street Journal reported last month.
Bringing the deal to market is still fraught with risk, however, particularly if global oil prices remain weak. Saudi Aramco reported last month that its profit dropped 12% in the first half of its financial year to $46.9 billion due to weaker global oil prices. Despite the drop, it is still the world's most profitable company.
Prince Abdulaziz will make his first major appearance as oil minister when he will be interviewed on stage at the World Energy Congress in Abu Dhabi this week.