KHOBAR, Saudi Arabia – The world’s biggest oil firm Saudi Aramco has picked a career petroleum engineer who oversaw its biggest projects of the past decade, Amin Nasser, to lead it through a price downturn and a market share battle.
The announcement from the Saudi Arabian state company ends five months of uncertainty about the new boss at the oil monopoly. Nasser is known for pushing for cutting edge technology and once said he sought to emulate the gas fracking revolution in the United States.
“Amin is a team player and a visionary. With his appointment the company is in a better position to refocus on upstream objectives,” said Sadad al Husseini, a former top executive at Saudi Aramco.
Nasser has been acting chief executive at Aramco since April, when his predecessor Khalid al-Falih was appointed Aramco’s chairman and also health minister.
The post of chairman had previously been held by Oil Minister Ali al-Naimi, himself a former chief executive of the company. Naimi remains in the ministerial position he has occupied for 20 years.
The April changes followed a shake up of leadership by King Salman who made young deputy Crown Prince Mohammed bin Salman the most powerful figure in economic and energy policy, while abolishing the old Supreme Petroleum Council, where energy policy had been historically made.
The deputy crown price is now the head of both an economic development supercommittee and a new council overseeing Aramco, making him the first royal ever to directly supervise the state giant.
Attempting to read Saudi oil policy has become a favorite game of oil market watchers since the kingdom made a strategic U-turn last year, persuading OPEC to open the pumps to fight for a market share with rival producers instead of cutting output to support flagging prices.
Most Saudi watchers still anticipate Falih would take over as oil minister when, and if, Naimi retires. Deputy Oil Minister Prince Abdulaziz, is seen as the second most likely candidate for the ministerial job.
“GREAT CREW CHANGE”
Nasser, now in his 50s, joined Aramco in 1982 after studying oil engineering at the King Fahd University. Over the past decade, he oversaw some of Aramco’s biggest projects, including the 2008 launch of the $10 billion Khurais oil field.
That was a crucial project to help Saudi Arabia reduce pressure on aging fields and sustain spare capacity, long seen by the market as a crucial cushion that can balance the market during times of oversupply or shortage.
The spare capacity became the kingdom’s tool to allow it to raise output over the past two years to over 10 million barrels per day in its fight for market share.
Nasser takes over as the CEO at a time most oil producers have been forced to slash spending because of low oil prices.
Nasser himself said this year the oil industry could scrap or delay $1 trillion worth of projects. This month sources said Aramco had delayed the expansion of Khurais.
Yet Aramco cannot cut spending too much as it needs to maintain its spare capacity. Nasser has warned the industry against excessive cuts as it could lead to talent and technology shortages in the future.
“We have seen how that approach to a spending crunch plays out. The reduced investment in technology and talent that characterized the 1980s and early 1990s should remind us that repercussions can be lasting,” Nasser said in March.
Nasser has said he has a mandate to add billions of barrels to Saudi oil reserves and double or even triple manpower in science and technology.
He has said Aramco has been spending about $1 billion per year on training and development to be able to face the challenge of a generational turnover, dubbed the “Great Crew Change,” as the Saudi population gets increasingly younger.
Aramco said in its statement that Nasser was appointed after the company’s Supreme Council held its first meeting in Jeddah, which was chaired by Prince Mohammed. The council also endorsed a five-year plan to 2019, Aramco said without giving details.
(Reporting by Reem Shamseddine; Editing by Tom Hogue and William Hardy)
This article was from Reuters and was legally licensed through the NewsCred publisher network.