Aramco chair may be next Saudi oil boss
KHALID AL-FALIH
Saudi Arabia is likely grooming Khalid al-Falih to replace Ali al-Naimi as oil minister, as the kingdom prepares for more uncertainty in oil markets.
On Wednesday, Saudi King Salman initiated a number of significant changes, including the promotion of Falih to chairman of state-owned Saudi Aramco, a position previously held by Naimi, the 80-year-old oil minister.
Falih, 55, who joined Aramco in 1979, and became its president and chief executive in 2009, now appears most likely to succeed Naimi, given the kingdom’s long-standing tradition of promoting nonroyals to the all-important position.
“It will be interesting to see if this is a precursor to him moving into the position of oil minister in the near future as the king continues to move in new blood,” said Emad Mostaque, analyst at Londonbased Ecstrat in a note. “It should also be noted that another son of King Salman, Prince Abdulaziz bin Salman (55) is the assistant oil minister.”
Since taking over four months ago after King Abdullah bin Abulaziz’s death in January, King Salman has pursued a muscular economic and foreign policy, assembling a regional coalition to attack Yemen, changing key personnel and raising the country’s oil production to record lev- els to capture greater market share.
Naimi has reportedly been considering retirement for a few years, but was asked to stay on by the late king and then survived a major reshuffle when Salman took over.
In another move that points to Falih’s rise, he was also handed the crucial role of minister of health, giving him a prized cabinet seat. Saudi Arabia’s latest budget saw a 50 per cent rise in health-care spending — the second-largest budgetary allocation after education.
Naimi, who has steered Saudi Arabia through a number of oil price dips, is spearheading the kingdom’s strategy to maintain output even as oil prices declined 50 per cent in less than a year.
The strategy has yet to pay off, as Saudi Arabia has not managed to vanquish highcost producers such as the Canadian oilsands and U.S. tight oil players. In addition, arch-rival Iran is also eyeing a return to the oil markets after a tentative agreement with global powers over its nuclear enrichment program.
“June looks to be a crucial month for Saudi Arabia on a number of fronts, with the OPEC meeting at the end of the month likely pressuring them to stop their current increases in oil production [and] Iranian crude potentially returning to the market,” Mostaque said.
Notably, Salman has left Aramco’s chief executive position vacant, leading to speculation that he may be grooming his son Abdulaziz, a regular participant in OPEC meetings, to run the world’s largest exploration and production company.
Salman also elevated Muhammad bin Nayef to crown prince after his brother Prince Muqrin asked to step down, according to the royal court. Prince Mohammed bin Salman, Salman’s son and current defence minister, was named as deputy crown prince.
June looks to be a crucial month for Saudi Arabia on a number of fronts