Sunday 29 / December / 2024
Dubai/Khobar/Riyadh: Saudi Arabia, the world's largest crude oil exporter, on Saturday appointed Khalid Al Falih, chairman of the state oil giant Saudi Aramco, as its new energy minister, replacing Ali Al Naimi, who had held the post since 1995.
A royal decree quoted on state television said the petroleum ministry had been renamed to become the Ministry of Energy, Industry and Mineral Resources, and that Falih would give up his other post, that of health minister.
Riyadh in 2014 introduced a new oil strategy aimed at defending its market share and allowing cheap crude to balance the market without cutting supplies, regardless of how low oil prices might fall.
Falih's appointment is only likely to strengthen this strategy rather than lead to any change in thinking, Saudi watchers and analysts say.
"The appointment of Falih has been expected for some time," said Saddad Al Hosseini, a Saudi energy consultant.
"He has the right industrial and executive experience to lead the reorganisation of the energy and electricity sectors."
Falih has for years been considered a possible successor to Naimi, who also stepped up to oil minister after heading Aramco.
After graduating in 1982 with a degree in mechanical engineering from Texas A&M University, Falih has spent more than 30 years in Aramco, where he was chief executive from 2009 until he was named chairman last year.
He is one of a handful of Saudi figures whose views are closely watched by traders and analysts for any insight on the kingdom's oil thinking.
Naimi, who turned 80 in August, began his career in oil at the age of 12 as an office boy at Aramco, and ends it as one of the country's highest-ranking non-royals.
He becomes an adviser at the Royal Court, the decree said.
Naimi has always tried to use Saudi financial muscle and oil supply scale to drive out higher-cost producers or rivals during oil market downturns.
He did so while helping to steer OPEC through a minefield of instability provided by the political travails of several member countries - including wars involving Iraq and Libya, and sanctions on Iran.
According to Bloomberg, Ahmed AlKholifey was apponited as central bank governor, replacing Fahad Al Mubarak, the official Saudi Press Agency reported.
AlKholifey was previously deputy governor for research and international affairs at the central bank, the Saudi Arabian Monetary Agency.
Al Mubarak was named central bank governor in 2011 and was previously chairman and managing director of Morgan Stanley Saudi Arabia. He oversaw Saudi monetary policy during a period of stress as the oil price slump depleted the government’s main source of revenue, led to a budget deficit of nearly $100 billion last year and ate away at the kingdom’s currency reserves, still among the largest in the world.
The governor had repeatedly reiterated Saudi Arabia’s commitment to pegging its currency to the dollar as the central bank’s net foreign assets declined by $115 billion last year. Twelve-month forward contracts for the Saudi riyal hit their highest level in two decades in January, reflecting growing bets by traders that the kingdom would allow its currency to weaken, though the speculation has since subsided.
Deputy Crown Prince Mohammed bin Salman announced a comprehensive blueprint to prepare the world’s largest oil exporter for the post-oil era last month, dubbed "Saudi Vision 2030." Plans include selling shares in state giant Saudi Arabian Oil Co., known as Aramco, and creating the world’s largest sovereign wealth fund. - Agencies
