New Saudi oil minister to play key role at Abu Dhabi energy congress

Saudi Arabia’s newly appointed Minister of Energy, Prince Abdulaziz bin Salman takes oath in front of King Salman. (SPA)
Updated 11 September 2019

New Saudi oil minister to play key role at Abu Dhabi energy congress

DUBAI: Saudi Arabia’s newly appointed Minister of Energy, Prince Abdulaziz bin Salman, will take center stage on Monday on the opening day of the World Energy Congress in Abu Dhabi.

The minister was appointed on Sunday to replace Khalid Al-Falih, who also stepped down last week as chairman of Saudi Aramco, the biggest oil company.

Prince Abdulaziz, a graduate of the King Fahd University of Petroleum and Minerals, has held advisory and executive roles in the Saudi oil industry since 1987, and has played a prominent part in the Kingdom’s dealings with the Organization of Petroleum Exporting countries (OPEC).

“If I had to count the world’s top five experts on the global oil market, he would be one of them,” Anas Al-Hajji, an independent oil analyst who has worked closely with the Saudi ministry, told Arab News.

The minister takes office at a crucial time for energy markets, with plans advancing for the initial public offering (IPO) of Aramco amid global concerns about future demand for oil.

At the event on Monday Prince Abdulaziz will take part in a 30-minute live televised interview for the broadcaster CNBC, conducted by Helima Croft, managing director and global head of commodity strategy at Canadian financial institution RBC Capital Markets.

The congress will be attended by representatives of 150 countries — ministers, executives from the big independent oil companies, and energy experts.

They include Alexander Novak, the Russian energy minister, his UAE counterpart Suhail Al-Mazroui, and OPEC secretary general Mohammed Barkindo. Aramco chief executive Amin Nasser is also expected to attend, as is Sultan Al-Jaber, UAE minister of state and chief executive of Adnoc,  the Abu Dhabi National Oil Company.

Delegates are likely to seek guidance from Prince Abdulaziz on the state of the Saudi oil industry in the wake of recent significant changes. Ellen Wald, American energy expert and author of the book Saudi Inc, told Arab News: “I would ask the new minister his assessment of how successful the OPEC/Non-OPEC Declaration of Co-operation has been.”

Al-Falih worked hard on the deal with Russian and other non-OPEC members to limit production in the face of growing US crude output.

“I’d also like to ask him about Saudi Arabia’s progress on nuclear power,” Wald said.

Energy expert Robin Mills, chief executive of Qamar Energy consultancy, said: “I think the Congress in Abu Dhabi is a friendly place for him to start off. I presume he will want to send a message of continuity, pressing on with the OPEC-plus deal and co-operation with Russia.”

Other experts echoed the need for continuity in the Saudi approach to global energy markets. David Hodson, managing director of Dubai consultancy BluePearl Management, said the new minister would want “to send a message of stability and reliability before the expected IPO.”

He said: “I find it hard to believe KSA alone could bring oil prices back up without Russian co-operation and a more optimistic global story.”

Turkey on brink of recession as economy collapses

Updated 13 August 2020

Turkey on brink of recession as economy collapses

  • Consumer debt has increased by 25 percent to more than $100 billion in the past three months

JEDDAH: President Recep Tayyip Erdogan’s popularity is plunging in lockstep with Turkey’s collapsing economy and the country is on the verge of a potentially devastating recession, financial experts have told Arab News.
The value of the Turkish lira has fallen to 7.30 against the US dollar and the central bank has spent $65 billion to prop up the currency, according to the US investment bank Goldman Sachs.
Consumer debt has increased by 25 percent to more than $100 billion in the past three months as the government moved to help families during the coronavirus pandemic, but the result has been a surge in inflation to 12 percent.
With the falling lira and increased price of imported goods, the living standards of many Turks who earn in lira but have dollar debts have fallen sharply.
The economy is expected to shrink by about 4 percent this year. The official unemployment rate remains at 12.8 percent because layoffs are banned, although many experts say the real figures are far higher.
To complete the perfect storm, tourism revenues and exports have been decimated by the pandemic, and foreign capital has fled amid fears over economic trends and the independence of the central bank.
Wolfango Piccoli, of Teneo Intelligence in London, said logic dictated an increase in interest rates but “this is unlikely to happen.”
Piccoli said central bank officials would strive to avoid an outright rate hike at their monetary policy meeting on Aug. 20. “A mix of controlled devaluation and backdoor policies, such as limiting Turkish lira’s liquidity, remains their preferred approach,” he said.
There is speculation of snap elections, and Erdogan’s view is that higher interest rates cause inflation, despite considerable economic evidence to the contrary.