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Saudi Oil, Finance Ministers Replaced

August 2, 1995

RIYADH, Saudi Arabia (AP) _ King Fahd replaced his veteran oil and finance ministers today in Saudi Arabia’s most significant leadership shakeup since he came to power in 1982.

Oil Minister Hisham Nazer will be succeeded by the president and chief executive of the giant petroleum company Saudi Aramco, Ali bin Ibrahim al-Naimi, according to a royal decree.

The finance and national economy minister, Mohammed Abalkhail, also lost his job and will be replaced by Suleiman bin Abdel-Aziz al-Sulaim, the commerce minister.

No reasons were given for the changes, and there had been no public signs of policy disputes between the ousted ministers and the king.

However, Saudi Arabia’s oil-based economy has encountered difficulties since the 1991 Gulf War, which has cost the kingdom tens of billions of dollars.

Also, low oil prices in recent years reduced revenues in a land that was flush with cash throughout the 1980s.

The move came as part of a Cabinet reorganization that had been widely expected, but its scope took some observers by surprise.

``They are ... trying to update and make it more like a modern government, with Cabinet ministers not being appointed for life. It’s a reform process going on,″ Edmund O’Sullivan, editor in chief of the London-based Middle East Economic Digest, said of the changes.

The announcement came on the fifth anniversary of Iraq’s Aug. 2, 1990, invasion of Kuwait, the event that precipitated the Gulf War and contributed to Saudi Arabia’s economic problems.

The kingdom remains one of the wealthiest nations on earth and is still the world’s leading oil exporter.

But oil prices are hovering at a relatively low $18 a barrel and Saudi Arabia and other members of OPEC have seen their share of the market dwindle in recent years as producers in the North Sea have pumped more oil to meet growing world demand.

There was no immediate word on whether the two ousted ministers would receive new ministerial posts.

Nazer, a graduate of the University of California at Los Angeles, had been oil minister for almost nine years. He has held a number of senior government posts, including planning minister for 11 years, before he became oil minister at a time when oil prices were sagging.

Naimi, the new oil minister, started working in the country’s oil industry at the age of 12 as an office boy with what was then the Arabian American Oil Company. Educated at Lehigh University and Stanford University, he worked his way through the ranks of Aramco and became president in 1984.

The Cabinet reorganization came as scheduled, two years after Fahd gave the Saudis their first constitution and created the kingdom’s royally appointed, 61-member Islamic-style consultative council, or Majlis al-Shura.

The main portfolios held by members of the Saudi royal family remained unchanged.

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