By Ahmad Khatib
When he was appointed Minister of Health in 2015, Khalid Al Falih was widely regarded as the understudy for the then Minister of Petroleum and Mineral Resources, Ali Al Naimi. In addition to joining the Saudi cabinet, Falih, had also replaced Naimi as Chairman of Saudi Arabia’s oil giant, Aramco, promoted from his chief executive officer at the company.
Earlier this month, Falih finally took over his mentor’s post, becoming the Kingdom’s new Minister of Energy, Industry and Mineral Resources in a cabinet reshuffle that placed him as the fifth minister in charge of oil resources in Saudi history.
Ahmed Zaki Yamani
Until Naimi became an international oil figure, Sheikh Ahmed Zaki Yamani was the most celebrated oil personality in the world.
Yamani started his career as a legal advisor at the office of the late King Faisal when the former was still the Crown Prince of Saudi Arabia.
Stories of his wealth and at times, his boastful attitude, were always covered in international media. He would arrive to meetings of the Organization of Petroleum Exporting Countries (OPEC) in a convoy of luxurious cars and also make sure to find time to shop for jewelry and clothes in European cities.
Yamani, who served as oil minister between 1962 and 1986, was famous for his ability to handle tough situations. Perhaps the two most memorable events were the oil embargo of 1973, which he played a pivotal role in quadrupling oil prices, and his near death experience after he was taken hostage by the infamous terrorist Carlos the Jackal during an OPEC meeting in Vienna in 1975.
Despite being the oil minister, Yamani was also a stern politician who spoke of crude as a “weapon” and often told other countries that they would survive without Saudi oil. In one of his televised interviews in Copenhagen, Yamani threatened the U.S. that some oil fields would be blown up if the former attempted any military action in the region.
When King Faisal was assassinated in 1975, speculation was rife that Yamani would be dismissed as oil Minister. However, it was not until 1986 that the late King Fahd dismissed him following allegations of mismanaging the Saudi oil policy during the oil glut of the 1980s, which resulted in a decreased market share for the largest oil producer.
Nominal oil prices dropped by more than 70 percent to below $10 per barrel in the early 1980s, after peaking at $35 in the 1970s.
Ali Al Naimi
Unlike Yamani, who came from a prominent family, Naimi is known to have joined Aramco as an office boy and risen through the ranks, benefiting from the education programs the company offered its employees.
In 1983, he became the first Saudi to hold the position of Aramco’s chief executive officer, which he kept until replacing Hisham Nazer as the Minister of Petroleum in 1995.
But the minister’s shrewd character and his country being the world’s top oil producer, weren’t the only reasons reporters ran after him for comments. Naimi was, and continues to be known for, his famous morning jogs.
One would be able to spot the petite, yet energetic Saudi minister speed walking early in the morning during OPEC and other international meetings. A group of dedicated reporters would be seen walking by in hopes of getting an interview or a comment from him. One reporter, according to the minister in one of his interviews, had to rent a bike to follow him as she could not keep up with him.
During his 21 years of rule of the Kingdom’s oil sector, Saudi Arabia was able to recover its market share, settle all its sovereign debts and accumulate historic foreign reserves, before seeing oil prices drop dramatically over the past two years.
Naimi has always given the impression of being a technocrat whose responsibility is implementing his government’s strategy. In his interviews, he would avoid giving political comments and stick to technical answers. Unusual for a technical minister in charge of the Kingdom’s major source of income, he was popular among the people even when oil prices were collapsing. This popularity was evident when his exit from the government was announced. People on social media were thanking the self-made man for all his efforts serving the country throughout his career.
Khalid Al Falih
When Naimi became the CEO of Aramco, Falih had just graduated with a mechanical engineering degree from the U.S. and joined the company. He also worked his way up the ranks until he was appointed CEO of the oil giant in 2009.
Seventeen years later, he took over Naimi’s post in the cabinet, but with different and clearer objectives, and a longer title as the Minister of Energy, Industry and Mineral Resources.
The Saudi 2030 vision, which was announced in April by Saudi Arabia’s Deputy Crown Prince, Mohammed bin Salman Al Saud, includes very ambitious goals related to the Kingdom’s most valuable resource and its biggest company, Aramco.
The plan now is to transform Aramco from mere oil giant into an industrial goliath and push it to be a major player in other energy-related sectors.
The vision also includes floating part of Aramco’s shares and opening its books to investors for the first time ever.
Falih’s mandate is substantially different than those of his predecessors. His main task is not just limited to acting as the spokesman of OPEC nor to simply ensuring the oil cartel’s decisions are in line with the Saudi oil strategy.
The Saudi vision aims at diversifying the country’s source of revenue and capping on investments as the core activity of the government.
The new minister’s comments earlier this year about the oil market and most recently about the difficulty of listing Aramco on international stock exchanges, outline some of the challenges he will be facing going forward.
However, the traditional argument amongst producers over production cuts, freezes and the interests of each country will not change. On the contrary, fierce competition for market share is expected to accelerate amid the regional conflicts and Iran’s return to the crude market after the lift of sanctions.
The biggest challenge facing the new minister will be maintaining a balance between implementing the new plans and preserving current Saudi interests in the market.
Ahmad Khatib is the Chief Executive Officer at the financial services group Amana Capital.