By Syed Rashid Husain
TORONTO: Ali Al-Naimi has a story to tell. Through the 317-page memoir, `Out of the Desert: My Journey from Nomadic Bedouin to the Heart of Global Oil,` to be published next month by Portfolio Penguin, the old wise man of the energy world is finally opening up his heart to the extent possible.
Ali Naimi has been an industry insider and for decades. His beginnings were humble. He joined Saudi Aramco at the age of 12, as an office boy. And decades later, he became the CEO of Aramco the world`s largest and most integrated Oil Company. And further he rose to become the Oil Minister of Saudi Arabia the global gas station.In his memoir, the excerpts of which were carried by Bloomberg, delving into history, Ali Naimi provides a historical background to the issues of the day. Russian participation in any proposed Opec output cut remains crucially important. Mr Naimi has a very clear and, one could say, loaded opinion about it. He is not ready to trust Russia! During his final years in the office, he became increasingly convinced, there was `zero` chance of countries outside the group joining in production cuts. When asked by one of his colleagues about the possibility of leading non-Opec countries such as Russia, Mexico, Kazakhstan and Norway joining the Opec oil output cut, he says, `I held up my right hand and made the sign for zero.Naimi has even less confidence on Igor Sechin, the powerful head of Russian energy company Rosneft. In the memoir, Naimi recalled how Sechin, `didn`t follow through` on his promise to cut output in 2008-09 during the global financial crisis.
In his biography, he also offered the first on-the-record account of a meeting between himself, Sechin and Venezuelan and Mexican officials in Vienna in November 2014, when both Russia and Mexico declined to cut production. `It looks like nobody can cut, so I think the meeting is over,` the former Saudi minister recalls saying, adding that even his own team was `clearly as unprepared for my response as the other ministers.
Recent episodes provide credence to Naimi`s mistrust.Earlier this month, Russia pledged, and at the highest level, to join Opec in cutting output. Yet, a day later, Rosneft`s CEO Igor Sechin categorically told Reuters his company will not cut or freeze oil production as part of a possible deal with the Organisation of the Petroleum Exporting Countries (Opec).
While in the office, Naimi avoided coming out openly on sensitive issues, his position, as revealed in the autobiography, remained fairly simple. `If we, Saudi Arabia, or Opec as a whole, cut production without the participation of major non-Opec members, we would be sacrificing revenues as well as market share.
Explaining the November 2014 Opec decision to allow the producers to produce at will, he writes `the oil market ismuch bigger than just Opec. We tried hard to bring everyone together, Opec and non-Opec, to seek consensus. But there was no appetite for sharing the burden,` he underlined. `So we left it to the market as the most efficient way to re-balance supply and demand.
The book also takes us back to the days, when the late King Abdullah in the capacity of the Crown Prince visited the United States. And there, he invited global oil majors to invest in the energy sector of the Kingdom.
But the initiative soon got embroiled into an argument. The late Prince Saud Al-Faisal led the initiative of foreign participation in the Saudi upstream energy sector. But on the domestic front, the number of adversaries, led by Naimi, was simply too much. Naimi finally concedes he had to battle minis-ters and princes`to keepinternational oil companies away f rom the kingdom`s oil riches. He also accepts it was wrong on his part to defend $100 a barrel price as fair to consumers and producers.
Naimi is also critical of the role of `swing producer` that Saudi Arabia adopted for itself, way back in 1983, while the legendary Shaikh Ahmed Zaki Yamani was still at the helm. It proved to be a `momentous and, in many way s, un fortunate decision.
Naimi is regarded as the architect of the market based policy within the Opec. Some criticise it. He differs. `I will let history be the judge as to the success of our market-based policy,` he writes in the epilogue of the book.
Let history judge the grand old man of Opec.
Source: Daily Dawn