By Michele Chandler
STANFORD GRADUATE SCHOOL OF BUSINESS — As he closes in on retirement after 13 years as president and chief executive of the Saudi Arabian Oil Company, Abdallah Jum’ah doubts that instability in the world financial markets will upset his company, an international petroleum giant that is the world’s largest producer of crude oil.
Likewise, Jum’ah says, neither a major U.S. push for oil independence nor a move toward renewable energy supplies will stop forward momentum for Saudi Aramco, which Jum’ah has helped shape into a leading player in the natural gas and refining industries.
The government-owned company, headquartered in Dhahran, Saudi Arabia, manages about one-fifth of the planet’s proven reserves of crude oil and supplies one in every ten gallons of oil that the world consumes each day, Jum’ah explained.
“As the largest and most reliable supplier in what is arguably the most important industry in the world, we believe Saudi Aramco’s activities and operations touch or influence virtually every individual on the planet,” he said. “Oil and oil products help to fuel entire countries and communities, power economic growth and development, and give a wide range of countries and institutions the energy they need. As an oil man, I am proud of that.”
The energy executive’s Nov. 13 talk was jointly arranged by three student-led groups at the Business School, including the View from the Top speaker series, which brings leaders from across the world to talk to student audiences about leadership and strategies for success. The Global Speaker Series and the Middle East and North Africa Club also helped organize the event.
Transcending cultural boundaries remains an important part of Saudi Aramco’s way of doing business, Jum’ah said. While the company is owned by the Saudi government, its official language has always been English. The company sends employees to earn degrees in Japan, Korea, and China to boost their global awareness. More than 60 different nationalities are represented throughout the oil firm’s global workforce of about 52,000.
“If, by any chance, you drop by our headquarters dining hall at lunch you will hear not only Saudi Arabic and drawls from the Texas oil patch but Spanish, French, Tagalog, Hindi, and a half dozen other languages,” Jum’ah explained. “For me, that’s a source of price and yet another competitive advantage for my company, because I know we can do business anywhere in the world and feel at home.”
Fielding questions from students, Jum’ah was asked whether oil production in the Middle East has peaked or will soon, as argued by author Matthew Simmons, an oil industry insider who wrote Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.
Jum’ah sharply criticized Simmon’s position, calling it a “fallacy of composition” resulting from drawing generalizations from one small area. “Saudi Arabians can tell you we have consistently produced in excess of three billion barrels every year, and we have added to our reserves an equivalent to that every year so we did not have to draw down our reserves,” Jum’ah said. “Technology is enabling us to do a lot of things. … That theory is truly discredited.”
He said he didn’t consider Silicon Valley’s push to develop renewable energy sources as an immediate threat to the Saudi’s heavily oil-dependent economy because people in major countries and the developing world alike will continue to buy gas-powered vehicles for some time. “We need all sorts of energy,” he said, adding that his company is engaged in a number of research and development activities related to creating cleaner burning fuels.
Saudi-born Jum’ah studied political science at the American University in Cairo and at the American University of Beirut. He later completed the Harvard Business School Program for Management Development at Harvard University and attended King Fahd University of Petroleum and Minerals. He joined Saudi Aramco in 1968, rising through the ranks to become the company’s president and chief executive officer in 1995.
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