Shell in the Middle East | Personally Speaking

Khalid Al-Falih is Senior Vice President for Industrial Relations and a Member of the Board of Directors of Saudi Aramco. He is also Chairman of the South Rub Al-Khali Company Limited (SRAK), a joint venture between Shell, Saudi Aramco and Total. He talks about his family, his background and his career path, which have led him to the very valuable work he does today�

Q. Can you tell us about your childhood, your family background and education?

I was born in Riyadh but my family originated from Zilfi, an oasis town in the middle of the desert north of Riyadh, where most of the people are involved in the agricultural sector. In the early days it was also famous for being a stop-over for camel caravans, trading from the Gulf through central Saudi Arabia over to the Red Sea.

At the time of my birth, my father was working for Saudi Aramco as a clerk in the Materials Supply organisation. He retired a few years ago, having risen through the ranks, over a 47-year career, to become head of Materials Supply, having reached the position of Vice President. I consider my parents the source of my values, and I credit my father for being a fine role model.

Not only am I following in my father�s footsteps, but it is likely that my eldest son will also join Saudi Aramco, as he has just been offered a scholarship by the company to attend university at MIT [the Massachusetts Institute of Technology] in the United States.

When I was a child, my father went to America to study at Rider College, now Rider University, in New Jersey in the 1960s. So, because of his education in America and his time spent working on the east coast of Saudi Arabia, my brother, four sisters and I, the eldest child, were initially brought up primarily by my mother and grandmother.

I started primary school in Riyadh and my recollections of the city in those days are of old-style Arab houses made of mud, unpaved roads and very few cars. Indeed, as children, when we saw a car or pick-up truck we would chase it and hang on to the back bumper. We played soccer barefoot in the streets, and whilst we had basic electrical supplies we certainly never had air-conditioners or washing machines. Life was pretty basic, but it was a very happy time.

In the late 1960s the family moved to Dammam to join my father, who applied to Saudi Aramco for a loan to build a house for us all. I was fortunate to go to two very good model Aramco schools for my primary and secondary education.

I then went to a Government high school until 1976. By then, Saudi Arabia had undergone a tremendous surge in economic development and the east coast where we lived was, due to its role in the production of oil and gas which was the source of the country�s wealth, a major beneficiary of this development.

After high school I joined what was then known as the University of Petroleum and Minerals but which today is called the King Fahad University of Petroleum and Minerals [KFUPM]. It was then, and still is today, the leading technical institute of higher education in the Kingdom and, indeed, we can see it from the window of my office as it is right next door to Saudi Aramco.

After I had been at university for one year, my father was posted to Houston, Texas. During a summertime visit to be with him I was introduced to Texas A&M University, and applied successfully to join, starting in 1979. I wanted the opportunity to broaden my experience and see what it was like to live abroad.

Of course, by the time I arrived in Texas my father was just leaving, but I still enjoyed my time at Texas A&M very much, returning to the Kingdom in 1982, having graduated with a degree in mechanical engineering.

Q. What were your first career moves?

As someone who had been provided with an Aramco scholarship, I joined Saudi Aramco on graduating from university. I started work in the summer of 1982, working in the famous Abqaiq oil field in the Eastern Province. The Abqaiq field is one of Saudi Aramco�s �crown jewels,� being one of the first and biggest oil producing fields in the Kingdom and, indeed, in the world.

I started as an engineer in project management, working on small projects in the Abqaiq plant and production facilities. The Abqaiq Plant carries out the basic processing of crude oil, taking out impurities such as sulphur, C02 and water and separating the associated gases to prepare the crude for export. Abqaiq is a central collection and processing facility for all of Aramco�s southern fields in the Eastern Province. It is, therefore, one of the most important plants for Aramco, and it was an eye-opening experience for me to work at a place of such importance.

My next posting in Aramco was to work outside the Kingdom on a pipeline project. I was sent to work with Williams Brothers, which had an office next to Leicester Square in London. It was quite a move for a young man to go from Abqaiq in the desert to Leicester Square in the centre of London. However, this proved to be the start of a long love affair between myself and London, and today I still spend much of my free time visiting the city and enjoying its cultural delights.

In London I was a member of a project management team which was supervising plans for the construction of part of the Kingdom�s then-new Master Gas System. This was a very challenging project, from which I learned a great deal.

Q. What happened after your role in London came to an end?

I became involved in a $1.3 billion project for a new refinery to be built in Qasim with a 180,000 barrel per day capacity. As the project was being managed by Bechtel in San Francisco, I went straight from London to San Francisco, where I remained until 1984.

I confess to being somewhat of a workaholic and during my time in San Francisco I attended the Golden State University in my spare time, where I started an MBA [Master�s of Business Administration], completing a few courses.

Unfortunately, the refinery project I had been working on was cancelled by the Government. At that time in the 1980s, oil prices had fallen drastically, as had production at Saudi Aramco, and projects were being cancelled left, right and centre. This was not a good time to be in project management and there was a heavy air of despondency at Aramco.

On my return to the Kingdom I spent some time working at a project to upgrade the Ras Tanura refinery, as well as on other projects around Aramco�s Northern area. I also enrolled at KFUPM to continue my MBA studies.

I was later involved in the reconstruction of the Ju�aymah Gas Plant, which had been seriously damaged following a major fire. This was a rare opportunity to get a chance to respond to such an accident, as such incidents are extremely rare at Saudi Aramco. We also pride ourselves on being the most reliable supplier, and we worked day and night to make sure all of our customers got their products with minimum interruption, so it was a very demanding but successful assignment.

Q. How was your family life taking shape at this time?

In 1986, one of the most important events of my life took place. I got married, to Najah, a name which in Arabic translates to �success�, and since I have known her I have been lucky and have known success. Like our parents, we had an arranged marriage, and I am very pleased to say that it has been a very happy and enduring marriage. Najah has been a great support to me and, I hope, I have been able to offer similar support to her.

Today we have five children, three girls and two boys, the oldest of whom is 19 and the youngest is eight. Najah has a Master�s degree and a PhD in geography and is a professor at the Dammam College of Liberal Arts, balancing both work and home life, much better than I do in fact.

Q. How did your career move on from this stage in your life?

In 1991, following the completion of a number of projects including the reconstruction of the Ju�aymah Gas Plant and other projects in Berri Gas Plant, I finished my MBA and became a supervisor in Consulting Services within Aramco�s Engineering Services organisation.

As a mechanical engineer I was back dealing with my speciality and began to focus on the development of engineering standards and core competencies of the organisation, as well as training staff. I became active with professional organisations and I became head of the local chapter of the American Society of Mechanical Engineers.

My work brought me into contact with local universities and colleges and I was involved in promoting professional societies as a way for professional engineers to enhance their development. This is a passion of mine. Continuous development and self-learning are two disciplines which I have practised all my life myself and I believe that part of my role as a senior manager at Aramco is to encourage others to do the same.

My next role was as a member of a team which was set up to merge Samarec [Saudi Arabian Marketing Company] with Saudi Aramco. This was a unique opportunity to be involved in the merger of a downstream marketing company with an upstream company and to manage the many human resources issues with two quite different cultures.

My next assignment was as Head of Consulting Services, before I was given a three-year posting as Manager of Maintenance and Operations at Ras Tanura refinery. This gave me the opportunity to be a part of the operational side of the company�s largest refinery, which has a capacity today of 550,000 barrels a day of refined products.

I then joined Corporate Planning, as Manager of the Business Analysis Department, which carries out analyses of the company�s businesses and the external environment in order to enable strategic planning of the company.

Whilst I was there, the Government charged Saudi Aramco with the task of developing the Kingdom�s gas strategy for the next 20 years. So between 1998 and 1999 I worked in a team to develop the Kingdom�s gas strategy, both within Saudi Aramco and in close co-ordination with the Government.

This opened me up to a broader understanding of the way a government works, of strategic planning, and of many different aspects of the company of which I was not aware.

Then in 1999 I was selected to become President of Petron, which is a joint venture between Saudi Aramco and the Philippines National Oil Company [PNOC]. So in 1999 the family moved to the Philippines, to Manila, where we spent a very interesting 15 months.

My wife and children enjoyed the Philippines enormously and were not happy when in 2001 I was recalled by Saudi Aramco to work with the team which was supporting the Government�s Natural Gas Initiative [NGI].

We began by examining the various proposals put forward by the IOCs [international oil companies] who had been approached by the Government. This led to the development of a framework for the NGI, from which came the �3 Core Ventures�.

Q. Your work on the Government�s Natural Gas Initiative led you to one of the roles you hold today as President of the South Rub Al-Khali Company [SRAK]. How did this come about and how would you define your role in SRAK?

I was made head of the negotiating team for the NGI and after a lot of hard work, Core Ventures 1 and 2 were abandoned, whilst Core Venture 3, which was led by Shell with Total as a partner, evolved into the South Rub Al-Khali Company Limited, of which I am today the Chairman.

SRAK was formed in November 2003 to explore for gas and associated liquids in two Contract Areas of some 210,000 square kilometres in the South Rub Al-Khali, Rub Al-Khali meaning �Empty Quarter�. The company is a joint venture between Shell, with 40 per cent, and Saudi Aramco and Total, each with a 30 per cent shareholding.

SRAK is frontier exploration. To me, it is like space exploration. We are exploring a completely unknown region in one of the biggest, if not the biggest, deserts in the world. From a climate standpoint alone the work is very demanding.

From a business concept, with Shell, Total and Saudi Aramco, SRAK means bringing together three of the best-in-class oil companies in the world and moulding them together into a unique, well-oiled corporate culture.

As for my role in SRAK, the company is managed by a leadership team, headed, very ably, by Patrick Allman-Ward from Shell, who is SRAK�s Chief Executive. Naturally I provide support, as does the rest of the Board, wherever and whenever we are required to do so, but management of the venture remains squarely with its management team.

The results from SRAK�s seismic data acquisition are encouraging and, as we speak, the drilling of SRAK�s first well is well under way [see pages 6-11].

For me the excitement of SRAK is similar to being the manager of a team of very fit athletes. SRAK is very much part of me as I led the negotiating team, I witnessed the birth of the company, and I am now its Board chairman. SRAK may be very small, compared to Saudi Aramco, but I dedicate as much time as I can to the company as I want it to be a success.

I am convinced that we will find hydrocarbons and prove that there is a new major gas province in the Rub Al- Khali, significantly increasing the Kingdom�s reserves and production. Having first made sure that domestic demand is met, Saudi Arabia could then become a major gas exporter, with gas being exported either by pipeline or as LNG [Liquefied Natural Gas]. So my expectation is that in six years from now we will be celebrating the completion of a major gas production facility and integrated infrastructure, delivering gas from the Rub Al-Khali gas fields within the Kingdom and hopefully even much beyond.

Q. Since your appointment to Chairman of SRAK, you have also gone on to take up several other very senior positions within Saudi Aramco. Can you please outline these roles?

Once SRAK was up and running and negotiations were over, I was also appointed to the job of Vice President of Gas Ventures Co-ordination for Saudi Aramco. That role ultimately developed into new business development and in 2003 I became Vice President of New Business Development at Saudi Aramco, working on various projects for the company to create new revenue ventures, as well as to leverage the hydrocarbon resources of the Kingdom.

One of the major ventures I worked on was the Rabigh venture. Rabigh is the site of a Saudi Aramco refinery on the west coast of the Kingdom on the Red Sea. The Rabigh project is a US $10 billion integrated refinery and petrochemicals complex which is under construction and will be completed in 2008. When finished, the refinery will have a production capacity of 400,000 barrels per day of refined products, whilst the complex will produce an additional 2.5 million tonnes of chemical products per annum. This will make it one of the biggest chemical plants in the Kingdom.

In 2004 I was appointed as Vice President of Exploration for Saudi Aramco, which gave me the opportunity to get to know even more about the upstream business, which is, of course, the key competency of the company

In 2004, I was appointed as Senior Vice President of Gas Operations and, at the same time, I was given a seat on the Board of Saudi Aramco.

In October 2005, I was appointed to my present role as Senior Vice President of Industrial Relations. This means that I am responsible for all of the company�s human resources and employee support operations, including community services, medical, safety and security issues, Government relationships, public relations, and training and human resources development.

Saudi Aramco is a huge company by any measures, but because of our economies of scale and efficiencies we operate with a lower number of employees than many other large energy companies, if one was to extrapolate turnover and profits related to manpower.

Saudi Aramco has 52,000 direct employees. We are able to run the business with such small numbers as we are a concentrated business with many of our operations located in a fairly small area of the Kingdom, mostly on the east coast. In addition to our workforce, we have some 90,000 contractors who support our operations and there are thousands of others spread around the world working in our different joint venture operations.

Q. What is the most challenging job you have held to date?

Every job that I have ever held I have looked on at the time as being the most challenging one. I take everything that I am doing at the moment very, very seriously. So every day when I pull myself out of my chair to go home I really feel that I am leaving a lot of important things undone because I have something to do which is even more important, which is to look after my family.

However, in answer to your question, I do believe that human resources are the most important element of any company, and that is as true for Saudi Aramco as it is for any other. We need to make sure that we train, develop and look after our people and empower them to take on the tremendous challenges and responsibilities of managing and running this company.

So, having said that, one of the most diverse and demanding roles I have had to date is the position I hold today as Senior Vice President of Industrial Relations. The job is challenging because the results are not as quantifiable as they are in production, operations or marketing.

Q. What do you do for relaxation?

I am the father of five children and I give them what time I can. They are all bright kids who have been well brought up by their mother and grandparents.

Whilst in the Philippines I tried to take up golf, but I did not have the time to excel and I do not play it now. To keep fit I am an avid exerciser and try to run eight miles a day at least three times a week. I use the gym a lot to relieve stress and swim when I can. At Saudi Aramco I also like to work in our Outreach programme when I can. I am also a member of the Dammam Municipal Council and was recently elected to be its Chairman. I enjoy this as I feel that it is part of my contribution to society to help wherever I can�but that�s a different story�.