Syed Rashid Husain
NAIMI era has come to an end!
After speculation for decades, the octogenarian Ali Al-Naimi has finally left the oil scene. He has been the dominating figure of the energy world - for more than two decades. At 81, it was time for him to hand over the baton. And so he did – after a long, splendid innings.
Naimi was the wheeler and shaker of the modern energy world. Emerging from a modest Bedouin roots, he was Ahmed Zaki Yamani at the turn of the 21st century. He was respected – and - all around.
People paid attention to every word uttered by this professional.
All these decades, at each OPEC outing in Vienna, reporters and analysts, tagged along each day at dawn for his habitual jog, or in later years, speed walk, along its downtown Ring Road. And as Bloomberg says, a few words from him during those walks were enough to indicate the mood to be expected inside the closed doors of OPEC conference rooms. Inside the closed OPEC doors, he was the ringmaster – everyone conceded.
In this era of instant communication, Naimi was never shy of speaking out his mind – but only when required. On numerous occasions, reporters hang on to his words and wire services endeavoring, at the spur of the moment, to decipher the real meaning of what he said and its broader implications to the global energy conundrum. Debates then raged in the galleries and in the pressrooms, among reporters, writers, and analysts, for those words carried real weight. They had the capacity to move oil markets, sway currencies and even the Wall Street.
Naimi, the wise, old man of the energy world, carried an aura around him. And indeed there are not many to be found around today – one could definitely add.
His departure was not out of blue. After all, he was 81. And he wanted to bid farewell for some time now. It was known. He wanted to retire and rest, at least for a while, before embarking upon his next project. Before each reshuffle in the Saudi cabinet, there have always been speculation and counter-speculation about his imminent departure. Diplomats were seen scurrying for answers.
Every time, one could vividly recall, there were long, lengthy discussions with senior diplomats in Riyadh about the possible departure of Naimi from the scene and its impact on the global energy scene. But to be fair none had the real answer. This all was speculation and conjecturing – all along.
Naimi survived many such cabinet reshuffles. But the day had to come and it finally did.
A debate is now on about the legacy he is leaving behind.
In his early years at the helm, oil markets were in disarray. As his tenure progressed, issues about the demise of oil era surfaced. Peak oil theory began making rounds. Markets became extremely volatile, peaking to $147 a barrel in summer 2008, before plummeting, as recession gripped the world.
All these tumultuous years, Naimi stood his ground. He was of the firm opinion that there is no dearth of oil. Even during the worrisome days of 2008, when during the Jeddah energy summit, people like Gordon Brown and Secretary Bodman were seen stamping their foot down, insisting supply was the issue plaguing the energy markets, Naimi remained cool, calm and clear-headed; there was no supply issue. Saudi Arabia is ready to supply all the oil that is required by the markets. Speculation was the culprit and not supplies, Naimi thundered during the summit in Jeddah.
Slowly and gradually, the diatribe changed. One way or the other, the world began conceding; supply was not the real issue. Most finally did accept there were issues other than supply, such as speculation, which roiled the oil markets.
This was Naimi’s victory.
During this extended stay at the helm, Naimi had to fight many other battles too. With volatility marking the era, there was always this subtle fear among the consumers: What if producers’ begin using oil as a political tool, as they did in 1973 – after the Yom-i-Kippur war. The fear was palpable. Wherever one went, this was the question that was almost certain to come.
Naimi, one could thus deduce, had faced this question multitude of times. And he went to great lengths in answering it. Times have changed – he has been insisting all these years. 1973 was a different era. We are now in the 21st century. Oil producers are much more dependent on petrodollars than they were in 1973. The dependence level of consumers has shrunk too. Oil today is no more a tool to advance political goals and objectives. It is more a product to be sold.
Naimi seemed to have won this round of battle too. For in the later phases of his tenure, with glut all around, the question had almost lost its vigor and the venom. Credit is due to Naimi – for this too.
Au Revoir minister Naimi.
And as one bids farewell to the old guard, it’s now time to welcome the new incumbent - Khalid Al-Falih. Having been groomed for decades under Naimi’s wings, he is no novice either. When he joined Aramco in 1979, Naimi era was about to begin. In November 2008, Al-Falih replaced Abdullah Jumah as the CEO of the world’s largest and most integrated oil company - Saudi Aramco.
Having spent decades in the oil corridors in Dhahran and now Riyadh, Al-Falih has been an industry insider – literally. As Aramco CEO, he is known to have taken some drastic measures within the company too. Fixated on details, he is ready to go the extra mile. Yet, he never withholds admiration – when due. But it also indicated his keen eye for details.
Energy is his business and nothing escapes his attention.
With Al-Falih at the helm, Saudi oil is in competent hands – one could say with some conviction.
