As the GCC tries to cope with new realities and takes bold, unprecedented measures to sustain itself in this subdued oil price era, the leadership seems keen to replace the old order with the new, placing more faith in adventurous youth than in the wisdom of the veterans.
Closely on the heels of Saudi Arabia replacing the time-tested Ali Al-Naimi with Khalid Al-Falih as the energy minister, neighbouring Bahrain has followed suit by relieving Abdulhussain bin Ali Mirza of his duties as energy minister, handing him the lesser portfolio of the Ministry of Water and Electricity.
The Kingdom’s oil and gas affairs will now be managed by Sheikh Mohammed bin Khalifa bin Ahmed Al Khalifa, a member of the ruling family, who occupies a number of executive positions in energy firms including chief executive of Bahrain’s nogaholding.
The change of guard in Saudi Arabia seems to be yielding results already, as demonstrated by Falih’s relative success in avoiding a rancourous feud (something his predecessor was unable to in the Doha talks in April) at OPEC’s June 2 meeting in Vienna and convincing the cartel’s members that the strategy to pump hard and defend market share was indeed working.
Iran, meanwhile, is steadily charting its course to pre-sanctions-era glory. The Islamic Republic is currently producing about 3.82mn bpd and oil minister Bijan Zangeneh hopes to achieve an output of 4mn bpd by the end of this year. Moreover, in its quest for customers, Iran has been aggressively venturing out to Europe, signing deals to sell crude oil to its once-upon-a-time customers, besides strengthening business relations with its existing clientele in Asia.
A few bright spots have appeared along the way – with non-OPEC supply declining further and OPEC oil producers agreeing to at least not inundate the world with more oil than it can consume. To the believer, the oil and gas industry has certainly sailed into calmer waters – the oil prices constantly trading around the $50 mark bearing proof.
A welcome transition is also being witnessed in the regional oil and gas sector. Low oil prices are beginning to have a ripple effect, coercing the industry to embrace cost-effective yet efficient technology both in the oilfield and off it.
A blessing in disguise, you might suppose!
