Prince al-Waleed bin Talal, in Toronto to visit his Four Seasons Hotel, says he is frustrated that Saudi Arabia’s political elite is not doing more to diversify the economy.Fred Lum/The Globe and Mail
"He has arrived."
As the hushed alert circulates in the lobby of Toronto's Four Seasons Hotel, a dozen employees rush to their positions near doors and elevators.
No one pays attention to the procession of primped and perfumed Canadian authors, musicians and business leaders flowing through the first floor for the Writers' Trust Gala.
Forget about author Joseph Boyden and Tragically Hip singer Gord Downie. The staff's eyes are trained to a slight man in a trim grey wool suit making his way to the front door with an entourage of male attendants in dark jackets.
Prince al-Waleed bin Talal, the Saudi billionaire who invests in everything from Twitter to Disney, is visiting the recently built hotel, the newest addition to his collection of five-star pleasure palaces. His portfolio also includes London's Savoy, the George V in Paris, and the Plaza in New York.
The 58-year-old nephew of Saudi King Abdullah made a name for himself as a maverick when he invested in Citibank in 1991 and made a killing by correctly betting the tottering bank would recover.
Now he is emerging as an activist in his home country with a rare public challenge to Saudi Arabia's political elite, whom he believes are recklessly ignoring economic threats posed by shale oil discoveries in the United States.
The Prince makes this point repeatedly in an interview with The Globe and Mail, one of his first since he rattled global oil markets in July by disclosing on his Twitter account a letter to Saudi Arabia's Oil Minister. The missive warned that the American shale oil boom would soon threaten demand for crude from members of the Organization of Petroleum Exporting Countries.
New shale oil discoveries "are threats to any oil-producing country in the world," he says.
Inside the Four Seasons, the Prince and his handlers nudge their way through the hotel's packed street-level "dbar" (a nod to chef Daniel Boulud) to a raised dais of taupe couches and chairs at the end of the lounge.
Signalling his comfort in Western society, the Prince juggles his prayer beads and Android phone while conducting business in the lobby bar. This is his custom, an adviser whispers – the Prince likes to make himself visible when spending time at his five-star resorts.
The Prince explains that Saudi Arabia has shrunk its oil production to 9.5 million barrels a day from 10.2 million barrels to address increased global supply. But he says he is frustrated that the country's leaders are not moving faster to diversify their economy and investments away from an oil industry that generates most of the nation's total output.
In less than two years, Prince al-Waleed says, the United States will be producing so much oil that it will be a competing exporter of crude. Oil prices currently hovering a little below $100 (U.S.) a barrel could sink as low as $80 over the next few years and potentially fall even further if more shale oil discoveries emerge in the United States, Europe and Australia.
"It is a pivot moment for any oil-producing country that has not diversified," he says. "Ninety-two per cent of Saudi Arabia's annual budget comes from oil. Definitely it is a worry and a concern."
Does Saudi Arabia get it?
"I will make them get it; there is no doubt about that. I'll make them get it. It is matter of survival. There is no choice but to get it. I will keep pushing until they do.
"The majority of Saudi Arabians get it. We will mobilize the media; mobilize the people to put maximum pressure on the government to do things to rectify the problem."
The more emphatic the Prince becomes, the more his attendants nod their heads in agreement. "He will tweet this all the time," one pipes up.
The irony of his economic Arab Spring ambition is not lost on the Prince. When demonstrators spilled into Egypt's Tahrir Square in 2011 to overthrow the Mubarak government, they too were prodded by social media. That same year, the Prince quietly invested $300-million in Twitter, the five-year-old microblogging service that was bleeding cash.
The Prince dismisses the suggestion that his investment was politically motivated.
"No, no, not whatsoever. I heard that many times. But when we make a business decision, we do it on business terms. We do not really look at the political implications of that decision," he says.
On financial terms, he says with a brief smile, the investment has been an enormous success, now valued at close to $1-billion (U.S.) in the wake of Twitter's successful initial public offering earlier this month.
Many Saudis share his concern about an economic reckoning as a result of the shale oil boom, he says, but powerful political figures continue to push for the country to expand its oil output.
These oil optimists, he says, have a false sense of security because of the country's enormous stockpile of nearly $700-billion in foreign exchange reserves. As a result of the reserve buffer, he says, Saudi leaders do not agree that a looming oil glut is an economic "emergency."
He estimates the currency reserves will last another decade if oil prices continue to fall. "In the life of a nation, 10 years is a blip."
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SPREADING THE WEALTH
Kingdom Holding Co., a Saudi company majority owned by Prince al-Waleed bin Talal, has full or partial ownership of hotels, real estate developments, technology companies and financial services firms, including:
Four Seasons Hotels Ltd.
Four Seasons Hotel, Toronto
Savoy Hotel, London
Disneyland, Paris
George V Hotel, Paris
Plaza New York Fairmont Hotel
Fairmont Raffles Holding
International
The Kingdom Tower
Apple Inc.
Twitter Inc.
Citigroup Inc.
News Corp.
Movenpick Hotels and Resorts AG
Source: Kingdom Holding Co.
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KINGDOM TOWER
The Kingdom Tower in Jeddah, Saudi Arabia is:
Billed as the tallest tower in the world
Will reach a height of more than 1,000 metres
Will cost $1.2-billion (U.S.)
Has more than 200 floors, including an observation deck at level 157
Has 530,000 square metres (5.7 million square feet) of floor space
Features a Four Seasons hotel and furnished apartments
Includes 59 elevators, including four double-decker and two triple-decker
Elevators to observatory travel 10 metres per second
Began construction last year.
Source: Kingdom Holding, Adrian Smith + Gordon Gill Architecture
Editor's Note: A previous version of this article stated Saudi Arabia has shrunk its oil production to 9.5 million barrels a day from 10.2 billion barrels. In fact, the country has shrunk production from 10.2 million barrels.