Saudi Arabia reappoints Naimi as oil minister
By an OGJ correspondent
NICOSIA, May 1 -- Ali Ibrahim al-Naimi has been reappointed for a third term as Saudi Arabia's oil minister, ending widespread speculation about his future, with analysts saying just last week that he was actually due to lose his post.
Under Saudi law, Cabinet members cannot serve more than one 4-year term unless reappointed by the Saudi King, Fahd Bin Abdul-Aziz al-Saud. Having first appointed Naimi on Aug. 2, 1995, and reappointed him on June 16, 1999, King Fahd had been expected to choose a new successor.
One Saudi official was widely quoted as saying that last week's meeting of the Organization of the Petroleum Exporting Countries would be Naimi's last as the representative for the Kingdom. "So he will pay farewell to his colleagues in the coming meeting of OPEC (in Vienna, Austria)," the official said on condition of anonymity.
Even Naimi last week acknowledged that he might lose his position, saying, "Nobody lives for ever" and that "I'll find out at the same time as everybody else."
Several other prominent Saudis had been mentioned as candidates to succeed Naimi in the post, including Prince Abd-al-Aziz Bin-Salman Bin-Abd-al-Aziz, undersecretary of the oil ministry, and Saudi Arabia's OPEC representative, Suleiman al-Harbesh.
Naimi's resignation speculated
Earlier this year, there was speculation that Naimi was on the verge of resigning from the Cabinet following disagreements over his handling of the $25 billion natural gas initiative with international oil companies (IOCs).
The Saudi Gas Initiative (SGI), formally launched in June 2001, is considered central to the long-term economic strategy developed by Crown Prince Abdullah to attract foreign investment into the economy.
But Naimi was said to have resisted the SGI, saying that Saudi Arabia's state-run oil firm Saudi Aramco could match the work of IOCs, which represented a potential threat that could result in Saudis losing control over key sectors of their own economy. At the time, Western analysts were said to be watching the fate of Naimi as his departure could have removed one of the main obstacles to the entry of foreign investors into Saudi Arabia's upstream natural gas sector.
But arguments between Naimi and IOCs over their unimpeded access to natural gas reserves are thought to be part of a wider struggle between modernists and conservatives in the Saudi regime about restructuring the economy and the role of foreign investors.
With the reported backing of Defense Minister Prince Sultan and Interior Minister Prince Nayef, half-brothers of Crown Prince Abdullah and claimants to the Saudi throne, Naimi was able to disappoint his detractors.
With the aplomb for which he has become known, Naimi hung on to his ministerial position and denied rumors of his departure, saying, "Ministers don't resign in Saudi Arabia."
Naimi's background
Born in Saudi Arabia's eastern province just as oil was discovered there, Naimi joined Arabian Oil Co. as an office boy in 1947 at age 12. He attended Saudi Aramco training programs, before going on to earn a BSc in geology from Lehigh University in Pennsylvania and a MSc in geology from Stanford University.
Rising through the Saudi Aramco ranks, Naimi served in a variety of technical positions before being appointed vice-president in 1975, senior vice-president in 1978, director in 1980, president in 1984, and CEO in 1988.
On assuming his post as minister of petroleum and mineral resources in 1995, Naimi became only the third Saudi to hold the position in 41 years, and he arrived in what was described as Saudi Arabia's most comprehensive cabinet reshuffle of the oil era, undertaken to help secure the country's fortunes after the 1990-91 Gulf War—which had cost more than $50 billion.
Naimi seemed the right man for the job. In the years following Saudi Aramco's full nationalization in 1980, he had helped make it the biggest oil company in the world and responsible for most of Saudi Arabia's oil output which, in the peak year of 1981, secured no less than $13 billion in revenues.
While securing the needs of his own country since then, however, Naimi has also managed to help steer OPEC through its most successful period over the past 3 years, generally maintaining oil prices in the preferred range of $22-28 bbl, but never high enough to trigger a switch to alternative suppliers or supplies of energy.
Naimi typically plays down the importance of his own his role, explaining OPEC's newfound cohesion and credibility by way of a change in attitude among member countries. "Our leaders set the pace for us," he said last year. "We're technocrats, mindful of the revenues and the importance of developing our economies."