DAMMAM: Saudi Aramco plans to raise its spending to $414 billion over the next 10 years, including on infrastructure and drilling, as the state oil giant moves into new businesses, executives said.
The spending plan is higher than Aramco’s projection last year of around $334 billion by 2025, as the oil producer has been expanding its businesses, the company’s chief executive Amin Nasser said on Tuesday.
“We are into so many sectors now,” Nasser told reporters on the sidelines of an industry conference aimed at promoting the Kingdom’s industrial base and the manufacture of a bigger share of products domestically.
Saudi Aramco’s plan includes $134 billion to spend on drilling and well services and $78 billion to maintain oil output potential, Nassir Al-Yami, general manager for procurement, told a conference in Dammam.
Aramco has already created a department for renewables to develop wind and solar projects and last month it signed a preliminary deal with petrochemical producer Saudi Basic Industries Corp. (SABIC) to build a $20 billion complex to convert crude oil to chemicals.
The project, which the partners said would be the largest crude-to-chemicals facility in the world and the first in the Kingdom, is part of the Saudi government’s effort to diversify the economy beyond exporting crude.
The Vision 2030 economic reform plan aims at ending its reliance on oil and to stimulate the domestic non-oil private sector. Its centerpiece is a plan to sell up to 5 percent of Aramco in an initial public offering (IPO) next year.
Saudi Aramco outlined a plan known as In-Kingdom Total Value Add (IKTVA) two years ago, aimed at doubling the percentage of locally produced energy-related goods and services to 70 percent of the total spent by 2021.
“Saudi Aramco is expected to spend more than 1 trillion Saudi riyals over the next decade. That has not changed, and we still want to see 70 percent of those riyals being spent locally,” Nasser said.
Supporting the growth of small and medium-sized enterprises (SMEs) is a main part of the IKTVA drive and Saudi Vision 2030, which would help create over 40,000 jobs and could add around SR30 billion to the Kingdom’s annual GDP, Nasser said.
Saudi Arabia’s Public Investment Fund (PIF) said in October it is creating a SR4 billion ($1.07 billion) “fund of funds” to support SMEs.
On Tuesday, Saudi Aramco signed 13 memoranda of understanding (MOUs) worth around SR6.3 billion with local and foreign companies as part a drive to expand the Kingdom’s industrial base and manufacture a bigger share of products domestically.
The MoUs signed were with companies such as China’s Sinopec, Dalma Gulf Drilling Co. and National Petroleum Technology.
Other agreements signed were part of the Kingdom’s plan to support the growth of small and medium enterprises (SMEs).
— REUTERS
Aramco lifts spending plans to $414bn over next decade
Aramco lifts spending plans to $414bn over next decade
Free trade negotiations between GCC, India mark new phase of partnership, says sec-gen
RIYADH: The Gulf Cooperation Council’s secretary-general affirmed that the negotiations for a free trade agreement between the GCC and India, and the signing of the joint statement, represents a new phase of strategic partnership.
Jasem Mohamed Al-Budaiwi said that this contributes to enhancing close cooperation and strengthening economic and trade ties, according to the Saudi Press Agency.
This came during the signing ceremony of the joint statement on launching the free trade agreement negotiations between the Al-Budaiwi and India’s Minister of Commerce and Industry, Piyush Goyal, which took place in New Delhi, on Tuesday.
During the signing ceremony, Al-Budaiwi said that the Terms of Reference, signed on Feb. 5, provide a comprehensive and clear framework for these negotiations. The two nations agreed to discuss enhancing cooperation in vital strategic areas, including trade in goods, customs procedures, and services.
Additionally, the framework covers Sanitary and Phytosanitary measures, intellectual property rights, cooperation on Micro, Small, and Medium Enterprises, along with other topics of mutual interest. This reflects the comprehensive nature of the agreement and its ability to keep pace with the future economy.
Al-Budaiwi expressed hope that these negotiations would lead to a comprehensive and ambitious free trade agreement that works to remove customs and non-customs barriers, enhance the flow of quality investments in both directions, and achieve further liberalization in trade and investment cooperation between the GCC and India for mutual benefit.
This would provide a stimulating economic environment and an investment climate that opens broad horizons for the business sector, supports supply chains, and accelerates the pace of economic growth in line with the ambitious developmental visions of the GCC states.
The top official affirmed the full readiness of the General Secretariat to host the first round of negotiations at its headquarters in Riyadh during the second half of this year.
The two sides held a meeting during which they reviewed the existing cooperation relations between the GCC and India and discussed ways to develop and elevate them to broader horizons, serving mutual interests and enhancing opportunities for strategic partnership between the two sides, particularly in the economic, investment, and trade fields.
They praised the role undertaken by the negotiating teams from both sides, appreciating the efforts contributing to reaching a comprehensive agreement that enhances economic integration and supports the smooth flow of trade between the two nations.
