THE SAG TAPS SAUDI ARAMCO TO FILL KEY POSITIONS

C O N F I D E N T I A L SECTION 01 OF 02 RIYADH 001823 SIPDIS DHAHRAN SENDS PASS TO NEA/ARP AND EEB/ESC/IEC E.O. 12958: DECL: 12/19/2018 TAGS: ECON ENRG EPET PGOV PINR SUBJECT: THE SAG TAPS SAUDI ARAMCO TO FILL KEY POSITIONS REF: A. REFTEL A) 08 RIYADH 1745 ¶B. B) 08 RIYADH 1655 Classified By: CG Dhahran Joseph Kenny for Reasons 1.4(b),(d) ¶1. (C) Summary. The Saudi Arabian Government (SAG) has increasingly looked to Saudi Aramco executives to fill important ministerial-level positions and ambassadorships. Three former Aramco executives have been named to Ambassadorships to the UN, China and Japan in the past year alone; with a possible fourth appointment to Bahrain in the making. The SAG views Aramco as one of the few trustworthy sources for professional and skilled Saudi managers. In addition to their energy mandate, Saudi Aramco has historically carried out strategically important initiatives from education and community development to small business formation and infrastructure and the trend will continue as the SAG gets more ambitious with its development goals and there are no other likely substitutes. Saudi Aramco continues to be the paradigm of a meritocracy and is seen as the honest broker on all fronts. End Summary. ¶2. (C) Consulate General Dhahran contacts in Saudi Aramco have indicated that a spate of recent or soon-to-be retired Aramco executives have been appointed to a number of high government positions. Although this is not an entirely new phenomenon (former Aramco president and current Petroleum Minister Ali Ibrahim al-Naimi being the most significant appointment back in 1995),several key appointments have been made to a diverse set of postings in just the past few years: - Shura Council (2004): Nasser Mohammed al-Ajmi, former Aramco executive vice president - Mayor of Greater Dammam (2005): Dhaifallah Ayesh al-Otaibi, former Aramco senior vice president - Shura Council (2005): Ibrahim Balghunaim, former Aramco head of quality control - President of Saudi Railways Organization (2007): Abdulaziz Mohammed al-Hokail, former Aramco executive vice president - Saudi Ambassador to China (2008): Yahya Abdulkarim al-Zaid, former Aramco vice president - Permanent Representative to the United Nations (2008): Khalid Abdulrazaq al-Nafisee, former Aramco vice president - Saudi Ambassador to Japan (2009): Mohammed Yusof Rafie, current Aramco senior vice president (retires Dec 31, 2008) - Saudi Ambassador to Bahrain (unconfirmed, TBD): Abdulmohsen Abdulaziz Omar al-Akkas, former Aramco manager While most of these individuals' backgrounds are technical in nature, the King believes their leadership and managerial skills and their work ethic surpass any other in the Kingdom and will continue to use them to encumber key positions in the Government. -------------- Aramco Educates Saudi Arabia -------------- ¶3. (U) Since its establishment in the 1930's, Saudi Aramco has been responsible for building schools for dependents of Saudi employees in the local communities, in addition to developing a top notch school system in its expatriate communities (AKA Camps). These schools are viewed as being head and shoulders above regular Ministry of Education institutions in terms of both curriculum and facilities. The performance of the students and their future academic successes bear this out. Since the 1950's, Saudi Aramco has sent tens of thousands of Saudi students abroad (predominantly to the U.S.) on scholarships to study engineering, geology, business, nursing and other majors. They have continued this scholarship program until today and many of the alumni advance to executive positions in Aramco and elsewhere in the Saudi private and public sectors. ¶4. (SBU) The once prestigious King Fahd University of Petroleum and Minerals (KFUPM) was initially established to furnish Aramco with a local source of skilled engineers and technicians. Many past and present members of the faculty and administration were or still are employees of Aramco. In fact, the rector of KFUPM holds a seat on Saudi Aramco's board of directors. Although KFUPM's reputation has deteriorated significantly over the past two decades, Aramco RIYADH 00001823 002 OF 002 is once again stepping in to help improve an important flagship Saudi institution. As part of this initiative, Aramco will significantly subsidize starting annual salaries for new Western professors in an attempt to recruit top tier faculty. Also, Aramco is facilitating the establishment of an exchange program between KFUPM and prestigious U.S. universities (reftel A). ¶5. (SBU) When King Abdullah decided to establish a premier graduate-level scientific research university in Saudi Arabia, he deliberately passed over the conservative and largely ineffective Ministry of Higher Education to design, build and establish the multi-billion dollar world class institution. Instead, he asked Saudi Aramco to undertake the construction and establishment of the King Abdullah University of Science and Technology (KAUST). The conventional wisdom among Saudis is that the King asked Aramco because there is no other organization in Saudi Arabia that would be able to complete the project to the King's very ambitious standards and on schedule and be able to develop it in the context of a secular, coeducational, international environment. In fact, re-employed Saudi Aramco American annuitants are heading this project, whose headquarters is in Washington D.C. -------------- Aramco Builds the Kingdom's Infrastructure -------------- ¶6. (U) The SAG has long turned to Saudi Aramco to undertake massive and strategically important infrastructure projects. In the mid 1940's, Aramco was tasked by King Abdulaziz Al Saud to build the Kingdom's first railroad, connecting Riyadh to Dammam. Some sixty years later, a former Aramco executive is currently overseeing the construction of the highly critical 1400-kilometer stretch of railway connecting the mineral rich western region to the planned mining city of Ras al-Zour in the East. Aramco built the first system of roads in-Kingdom, developed the ports, and oversaw consolidation of the electrical grid and other utilities (par 7). They also developed the first air lines (albeit, corporate) to assist in the exploration and recovery of oil, as well as to transport their employees to various and remote locations throughout the country. This paved the way for the foundation of the Saudi national airlines, Saudia. ¶7. (U) Aramco provided the bulk of the American and Saudi executives and technicians that staffed Saudi Consolidated Electricity Company's (SCECO) takeover of the ailing Dhahran Electricity and Power Company in 1977. The impressive expansion of the Kingdom's power connectivity and capacity realized during this era is largely attributed to Aramco's expert project management capabilities. Although SCECO has since been replaced by Saudi Electricity Company, Aramco remains deeply involved in the monitoring of electricity generation Kingdom-wide. ¶8. (C) Comment: As the SAG, under King Abdullah's leadership, continues to pursue an ambitious economic development agenda and pursue its desire to be a key player in world politics, it will have to continue to confront the incompetence and nepotism that has infiltrated many critical ministries and institutions throughout Saudi society. With Aramco's reputation of being a legitimate meritocracy that has largely stamped out nepotism and tribalism (reftel B), hand-picked Aramco employees, or the company as a whole will continue to be tapped to play key roles throughout Saudi society. As one Aramco employee said, "In Saudi Arabia, if you want something done right, then call Aramco." End comment. (Approved: JKenny) RUNDELL