Adamant: Hardest metal
Saturday, April 26, 2003

Meeting could be last for Saudi oil minister

<a href=news.ft.com>Financial Times By Carola Hoyos Published: April 24 2003 5:00 | Last Updated: April 24 2003 5:00

Today's meeting of Opec ministers could be the last for the group's most important participant. Ali Naimi, Saudi Arabia's oil minister and the architect of the Organisation of Petroleum Exporting Countries price stabilisation policy, acknowledged yesterday that he might lose his position when the kingdom reshuffles its cabinet early next month.

"Nobody lives for ever," said Mr Naimi. "I'll find out at the same time as everybody else."

Mr Naimi, 67, took up his post in 1995, becoming only the third Saudi oil minister in 41 years. Most recently he helped patch up his country's strained relations with Washington when he quickly increased the kingdom's oil output ahead of the war with Iraq and warded off a rise in prices.

He has shepherded Opec through arguably its most successful period over the past three years, maintaining oil prices in the $20 a barrel range, well above market level, but not so high as to trigger a significant drop in demand because of recession or the growth of alternative suppliers. But the success came after the bitter lesson of 1997, when Mr Naimi pushed for an increase in Saudi Arabia's quota, misjudging world demand and pushing prices to below $10 a barrel.

Any successor would inherit a challenging job, taking over as Saudi Arabia faced the return of Iraq to the global oil market and the eventual task of relinquishing some of its market share to allow Baghdad to increase its exports and rejoin the Opec quota system.

Opec and Saudi Arabia in particular will also have to answer calls from members, such as Nigeria, Algeria and Venezuela, for a larger portion of the pie.

Another challenge will be Saudi Arabia's stalled negotiations over the $25bn gas initiative, which would allow international oil companies led by Royal Dutch/Shell and ExxonMobil a foothold in Iraq's gas industry.

Mr Naimi - whose career from office boy to oil minister has spanned 55 years, during which Saudi Arabia's oil sector has gone from one dominated by the "Seven Sisters" international oil companies to one run by the state without the help of outsiders - has driven a hard bargain since the deal was signed in 2001.

While international oil company executives hope for a more accommodating negotiation partner, Saudi oil ministry officials less health conscious than Mr Naimi are likely to keep their fingers crossed for a boss not prone to taking early morning jogs and one willing to overturn Mr Naimi's no-smoking policy.

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