By Dmitry Zhdannikov
LONDON, Nov 4 (Reuters) - As Saudi Arabia prepares for theworld's biggest initial public offering (IPO), memoirs from itsformer oil minister Ali al-Naimi offer a rare insight intodecades of domestic infighting over the future of state-runSaudi Aramco.
The 300-page book, titled "Out of the Desert" and publishedby Portfolio Penguin, describes the battles waged by theinfluential industry veteran including fending off Westernattempts to gain control of oil giant Aramco's best assets.
Naimi joined Aramco as a teenager in 1947 and climbedthrough the ranks to become company chief from 1983 to 1995,when he was named minister of petroleum - a post he retaineduntil his retirement this year.
His career spans the rise of the "petro-politics" thatdefined the recent history of the kingdom, including the birthof the Organization of the Petroleum Exporting Countries in 1969and the oil embargo in 1973.
Even though the book holds back from detailing any politicaljostling within the secretive Saudi royal family and government,it gives a clear idea that various factions have often pushedfor different paths for Saudi Aramco.
Naimi describes several instances throughout his career whenhe fought top executives from Western companies including U.S.giant Exxon Mobil trying what he describes as winning lucrativedeals via good connections with some Saudi officials.
"They (Exxon) wanted us to turn over highly restrictedinformation about our Ghawar field, for instance, that isn'teven known within the kingdom outside of the oil ministry andSaudi Aramco," Naimi writes about gas talks between oil majorsand Aramco at the end of the 1990s.
If Aramco does list its stock as planned in 2018, investorswould expect the firm to disclose classified information on itsreserves, including Ghawar - Saudi Arabia's biggest oilfield.
But it could avoid doing so given the sensitivity of theissue and just say that by buying into Aramco, investors wouldgain access to the world's cheapest reserves, still controlledby the state, according to sources briefed on the offering.
Naimi retired in April and was replaced by Aramco chairmanKhalid al-Falih as energy minister.
The Saudi oil portfolio is overseen by Deputy Crown PrinceMohammed bin Salman, 31, who has been actively promoting theAramco IPO.
Sources in the kingdom have suggested the royal family isfar from united on the issue as some see the offering as givingaway the crown jewels cheaply to foreigners at a time of low oilprices.
Naimi says he fought hard for "the heart and soul" of Aramcoto avoid giving Westerners unnecessarily lucrative deals.
"(Exxon's then-boss) Lee Raymond for instance was trying tomake the most of his relationship with (the foreign minister atthe time) Prince Saud al-Faisal to get a better deal forExxonMobil," Naimi writes.
Naimi says he was convinced that as part of gas talks in the1990s, Exxon and other oil majors hoped to acquire cheap Saudireserves of gas condensate, a high-quality form of crude oil.
"I told Lee Raymond my views and that I felt he was tryingto gain an unfair advantage. Lee responded in kind and it got alittle ugly. From that point onward our negotiations were over.I haven't seen Lee Raymond since, which was a shame because wewere once good friends," Naimi continues.
Naimi effectively won the battle, as Aramco offered to oilmajors pure upstream gas exploration contracts without gascondensate and only Shell and Total entered into a deal.
A similar fight happened a few years earlier when Naimi saysShell, Mobil and Total tried to persuade his predecessor, oilminister Hisham Nazer, to allow them to develop the Shaybahoilfield for what Naimi saw as an overly expensive contract.
Naimi even says Francois Mitterrand, France'sthen-president, was convinced that King Fahd had promised himthe field in exchange for French participation in the first GulfWar.
Again, Naimi fought against the idea as the companies became"greedy".
He cites praise from his successor, Falih: "By holding hisground, minister al-Naimi was not necessarily protecting SaudiAramco, he was protecting the kingdom from having substantialvalue drained away in those transactions."
As Aramco's IPO draws nearer, the issue of value drain willbecome increasingly relevant.
To cite Naimi: "When the camel goes down, many knives comeout. That is an old Arabic proverb. In the mid-1980s the camelwas Aramco, the knives were the vested interest of Saudis whoviewed us as a symbol of foreign influence and the era ofcolonialism." (Writing by Dmitry Zhdannikov; Editing by Dale Hudson)
