As oil markets have watched crude prices reach historic levels during the latter months of 1999, attention more and more has focused on the statements and actions of Saudi Arabia’s oil minister, Ali Ibrahim Naimi, who helps oversee and implement the policies of the world’s largest oil exporting nation.
A pivotal player in the cooperative agreements between OPEC and independent producers that not only set the price recovery of this year in motion but have now prompted concerns about supply shortages this winter, Naimi’s words have been closely evaluated in recent weeks.
Although he has stressed that he sees no need for OPEC to adjust its production levels before the end of this coming March, the Saudi official has also made it clear that the kingdom is prepared to work with others to stabilize oil markets in the event of a serious supply crisis, whether it be from Y2K problems or other disruptions.
When he first became the kingdom’s oil minister in 1995, Naimi was perceived as being technically adept but unprepared for the political role that his predecessors had savored. It is believed that he had never wanted the top oil job and would have been happy to have simply retired as Saudi Aramco’s president and CEO.
In late 1997, Naimi helped push through an OPEC accord that not only dramatically raised the cartel’s ceiling, but also gave Riyadh a generous increase in its quota. The Saudi oil minister was subsequently blamed for the price collapse of 1998 that was in part sparked by the Asian economic crisis and plentiful crude supplies.
Although the oil minister only advises on Saudi energy policy and it is the senior members of the royal family who dictate it, Naimi ended up being the scapegoat in the eyes of the oil markets.
While analysts perceived that Naimi’s chances of being reappointed to the oil ministry in mid-1999 were all but nil, the minister’s ability to forge agreements both within and outside of OPEC helped secure his post.
Indeed, the oil minister was successful in helping convince errant OPEC producers like Iran, Nigeria and Venezuela to mend their output ways, and he has continued to work closely with the Venezuelan and Mexican oil ministers to ensure that the agreed-upon production cuts have held firm throughout the year.
Though Naimi has scored points with his government for rallying producers to adhere to their supply reductions, he has also been reprimanded for publicly espousing his viewpoint on foreign investment in the kingdom’s upstream sector.
The minister had contradicted signals being sent by senior Saudi officials that the Gulf producer was preparing the way for U.S. and European oil firms to strike deals in Saudi Arabia’s oil fields by insisting that Aramco could do much of the work itself.
Since being warned by those same officials, Naimi has tempered his remarks. But, he may well have won his point, as the government has stated that development of oil fields by foreign firms will only come after investments in other priority areas of its energy sector.
Naimi was born in 1935 into a Bedouin family and lived in the desert until he was 7, when he moved to a small town in the Eastern Province where his brother worked for Aramco.
In 1947, Naimi joined Aramco as an office boy and over the next four decades worked his way up the ranks to become president of the state oil company before being named the kingdom’s oil minister in 1995, when he replaced Hisham Nazer.
From his start as an office boy, Naimi moved through a company training program to become an assistant geologist in the exploration department in 1953. He then studied at the International College in Beirut and the American University of Beirut before attending Lehigh University in Pennsylvania. He left Lehigh with a degree in geology and earned a masters from Stanford University in 1963 in geology.
From 1963-67, Naimi worked as a hydrologist and geologist in Aramco's exploration department. He followed that with a two-year stint in the company's economics and public relations departments. He completed the Executive Program in Business Administration at Columbia University in 1974 and the Advanced Management Program at Harvard in 1979.
Naimi became vice president of the state oil company in 1975, senior vice president of oil operations in 1978 and was elected an Aramco director in 1980. In 1982, Naimi was appointed executive vice-president of operations. He was named Aramco’s president in 1984, succeeding H.H. Goerner to become the company’s first Saudi to hold that job. Four years later he earned the title of chief executive officer, succeeding John J. Kelberer
( oilnavigator )
© 2000 Mena Report (www.menareport.com)
