Saudi Arabia’s New Oil Minister Says Main Aim Is Global Oil Stability

By Ghazanfar Ali Khan

Saudi Arabia will remain committed to meeting global demands for oil and to a stable petroleum policy that will go a long way in addressing the grievances of oil-producing nations as well consuming countries across the globe, said Khalid Al-Falih, new energy minister.

He reaffirmed “the commitments to meet demand and maintain stable oil policies.”

Al-Falih said the Kingdom would remain committed to maintaining its role in international energy markets and establishing its position as the world’s most reliable supplier of energy.

“We are also committed to meeting existing and additional hydrocarbons demand from our expanding global customer base, backed by our current maximum sustainable capacity,” said Al-Falih in remarks published on Sunday in Asharq Al-Awsat, a sister publication of Arab News.

Al-Falih, who will be heading the new Ministry of Energy, Industry and Mineral Resources, said Saudi Arabia is taking steps to shore up its public finances and reduce the economy’s reliance on oil. He expressed optimism that the Kingdom will march ahead with the ambitious diversification process within the framework of the Kingdom’s 2030 Vision that calls for cutting dependence on energy.

Commenting on the appointment of Al-Falih and his vision for oil policies, Ismail Al-Soliman, a political analyst, said the expertise and experience of the new minister will steer the nation to an era in which the Kingdom’s economy will be stronger despite falling oil prices or amid current market situations.

“It’s more a question of vision, right plans and stable policies that ensure success and better performance in the interdependent global market,” said Al-Soliman, while referring to the budgetary provisions. He said that the government had already increased gasoline prices and decreased spending in a move to narrow the deficit.

“There will not be any impact on the oil market despite the departure of a veteran like Ali Al-Naimi,” said a local banker, adding that Al-Falih is also a well-known name in the energy world. He, however, said that Al-Naimi had his own style of working and leading the oil market during the long years of his stay as minister.

Even foreign experts and oil analysts have very high opinions about Al-Falih, the new incumbent.

“What some may not realize is that Al-Falih also commands much respect in the oil world,” said Jason Bordoff, a professor at Columbia University and founding director of the Center on Global Energy Policy in New York, in a report published Sunday. “Everyone who pays attention to Saudi Arabia and oil prices knows Al-Falih is very widely regarded and respected as a capable leader of Saudi Aramco,” he said.

After more than two decades in the post, Al-Naimi, who’s been the central player in scores of OPEC meetings, and steered global crude markets through several ups and downs, is succeeded by Al-Falih.

The change was part of a wider revamping of the government that also saw the electricity ministry discontinued and its activities folded into Al-Falih’s portfolio.

Educated in the US, Al-Falih spent his entire three-decade career at Saudi Aramco. “Al-Falih’s appointment is an assurance of the continuation of the current Saudi oil policy,” Anas AlHaji, the chief economist at the Irving, Texas-based NGP Energy Capital Management, said.

Al-Falih is well respected in the industry. It was recently announced that he was named 2016 Energy Intelligence Petroleum Executive of the Year, an award that is handed out annually at the Annual Oil & Money Conference in London.

Al-Falih holds a bachelor of science degree in mechanical engineering from Texas A&M University and an MBA from King Fahd University of Petroleum and Minerals (KFUPM). He is currently serving on the board of King Abdullah University of Science and Technology (founding member) and on the American University of Sharjah board of trustees.

Under Al-Falih’s leadership, Saudi Aramco has moved to secure its market share. It’s spending as much now as it did before the crash in crude prices and is looking to invest in its refinery network around the world. Al-Naimi, 80, who had been oil minister since 1995, has been appointed an adviser to the royal court.