What you need to know about Saudi Arabia’s new energy minister

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Prince Abdulaziz bin Salman, the son of Saudi Arabia’s King Salman bin Abdulaziz, on Sunday became the first member of the Saudi royal family to head the Ministry of Energy.

An oil industry veteran, Prince Abdulaziz replaced Khalid al-Falih, who has held the post since 2015.

Prince Abdulaziz first joined the Ministry of Petroleum and Mineral Resources in the late 1980s and has been a frequent member of Saudi Arabia’s Organization of Petroleum Exporting Countries (OPEC) delegation. He served as assistant oil minister from 2004 to 2015, deputy oil minister from 2015 to 2017, and Minister of State for Energy Affairs since 2017.

He also headed the Economic and Industrial Studies Department at the Research Institute of King Fahd University of Petroleum and Metals from 1985 to 1987.

Prince Abdulaziz info
Prince Abdulaziz info

“With the appointment of his Royal Highness Prince Abdulaziz, the Kingdom brings an oil market veteran of 30+ years to lead its energy sector,” said Abdulaziz Moqbel, Saudi energy observer and columnist.

“For a cyclical industry such as oil and gas, it’s not the years that only matter, but the state of the oil market at different cycles of glut and/or deficit. Prince Abdulaziz has been at the leadership level for many of the oil markets cycles,” Moqbel told Al Arabiya English.

The latest reshuffle comes in the span of just one week, just days after al-Falih was replaced by Public Investment Fund Governor Yasir al-Rumayyan as chairperson of oil giant Saudi Aramco, a move that is set to prepare the company for its upcoming initial public offering.

At the end of August, it was also announced that the Kingdom’s Ministry of Energy, Industry and Mineral Resources, then led by al-Falih, would be split into two bodies. Bandar Alkhorayef, a private sector investor and executive was named the chief of the new Ministry of Industry and Mineral Resources. The new ministry will become fully independent from January 1, 2020.The original ministry was established in late 1960 and has now seen six ministers since inception.

Al-Falih changed his predecessor’s oil output policy from maintaining output to price US shale oil producers out of the market to a coordinated output-cut with OPEC+ members to maintain oil prices. The Kingdom’s previous policy had seen the price of oil crash to below $30 a barrel in early 2016.

On Sunday, a Saudi official told Reuters that there will be no shift in the Kingdom's OPEC policy after the appointment of Prince Abdulaziz, and that the Kingdom will continue with the OPEC-led output cut agreement.

Meanwhile, energy observers and analysts have weighed in on the latest appointment, with many saying that they do not expect major shocks to the market, given that Prince Abdulaziz is a known technocrat who has been instrumental in helping draft the Kingdom’s established oil policies.

“Among all oil officials, the Prince attended more OPEC meetings than anyone else and he has been participating in the making of the Saudi oil policy since the 1980s. He is the institutional memory of the Saudi oil policy and OPEC,” Anas Alhajji, energy market expert and Managing Partner at Energy Outlook Advisors LLC told Al Arabiya English.

Elsewhere, Joe McMonigle, energy professional and President of The Abraham Group, an international consulting firm headed by former United States Energy Secretary Spencer Abraham, also said he expects oil markets to remain stable.

Saudi Arabia is currently working towards listing Aramco in 2020-2021, as the company wraps up its merger with petrochemical firm Saudi Basic Industries Corp (SABIC).

Reports have indicated that the Kingdom is considering a plan to split the upcoming Aramco IPO into two stages and will introduce a portion of its listing locally on the Tadawul later this year, followed by an international offering in 2020 or 2021.

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