Assistant oil minister and son of King Salman are now favourites to replace Saudi Arabias veteran oil minister
The appointment of Khalid al-Falih as Saudi Arabias new Health Minister and chairman of Saudi Aramco offers up as many questions as it answers.
As the CEO of Aramco, Al-Falih has been responsible for some of the largest megaprojects ever witnessed in the kingdom. In the six years since he was appointed, he has transformed the worlds largest oil company into a fully diversified energy giant.
However, there are some observers in the kingdom that question whether Al-Falihs move should be construed as a promotion or if it is a sideways appointment into a ministry that is traditionally extremely challenging.
Running health is not easy and Al-Falih probably knows he has a difficult task ahead of him, says a Saudi observer who asked not to be named. It will be made all the more difficult by the fact that if he knew there was a ministerial role in the offing he would probably have assumed it would be as [Oil Minister Ali] al-Naimis replacement.
There is no question that health hasseveral major issues that Al-Falih could get tied up in for several years. There is a massive building programme under way in the kingdom, but the vast majority of the schemes are small clinics and medical centres. Even the large medical cities are not nearly as technical and expensive as most Aramco projects.
Regional projects tracker MEED Projects states that there are 240 healthcare schemes worth a total of $11.5bn at various pre-execution and execution phases in the kingdom. Al-Falih has been used to overseeing single projects worth $20bn during his tenure at Aramco.
His mandate will be to realise Riyadhs aim to bridge the gap between rural and urban care, as well as ensure all of the active projects are delivered on time and on budget.
Al-Falihs chairmanship of Aramco means King Salman bin Abdulaziz al-Saud still views the official as an important part of the countrys senior management team in the energy sector. However, another official believes that this adds further distance to the coveted oil minister role.
There are rumours in the kingdom that a new ministry will be created that has a far-reaching mandate and that will cover natural resources, heavy industry and power generation under the stewardship of current assistant oil minister Prince Abdulaziz bin Salman.
Such a move would certainly consolidate King Salmans hold on the kingdom as Prince Abdulaziz bin Salman is his fourth son, and would also indicate that Al-Falihs role in this proposed super ministry would involve being responsible for Aramco.
Aramcos former head of exploration & production, Sadad al-Husseini, thinks that such a move makes sense if Prince Abdulaziz bin Salman is being lined up to take over from Al-Naimi when the time comes for the 79-year-old official to retire.
We are seeing that this king is a lot more comfortable about appointing House of Saud members into key positions as well as removing them if they are not doing the job properly, says Al-Husseini. And remember that [Prince Abdulaziz bin Salman] has vast experience in the oil ministry already. He is based in Riyadh, knows Opec, he knows the oil business and will be able to maintain policy and maintain stability. This puts him at an advantage.
Maintaining Riyadhs current oil policy will require an executive with relevant experience of the oil business. Al-Naimis long tenure in charge has meant there is a vacuum that has left very few candidates with the requisite skills and experience to carry out his role. Prince Abdulaziz bin Salman is one of the few. The royal has been working in the oil ministry for 28 years and is said to be a popular figure. He has worked closely alongside Al-Naimi for decades and is still relatively young at 55.
There are so few candidates that it is basically a two-horse race between Al-Falih and [Prince Abdulaziz], says the Saudi observer. Traditionally, the royals have been kept away from the oil business, but Prince Abdulaziz has got a genuine claim for the job. He is qualified regardless of who his father is.
What is clear is that Riyadh is determined to maintain its current strategy of keeping production high and sustaining market share despite lower oil prices. All of the kingdoms oil sector senior management believe this is the correct strategy to combat growing competition and is certain to continue even if Al-Naimi leaves his post early.
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