A number of Saudi Aramco – US deals will diversify Saudi trade with the US. The Middle Eastern oil giant expects to complete $50 billion (£38.36 billion) worth of deals with US companies today (Saturday.) This is because Saudi Arabia wants to move beyond oil exports towards a more diverse economy. Amin Nasser, the CEO of Aramco, informed reporters of this during a conference between Saudi and American business executives.
Coincidentally, the conference coincides with President Trump’s visit to Riyadh. Plans for the agreements were made in advance, and the company will sign a total of 16 agreements between 11 different companies. Among these will be a number of memorandums of understanding for JVs. Some of the Saudi Aramco – US deals will involve bilateral JVs between Saudi and American companies.
According to Amin Nasser, the deals will increase trade between the two countries. He stated that Aramco currently spends $6.5 billion each year on goods and services from the US. The agreements will relate to bilateral trade, including a joint venture with Jacob Engineering Group Inc. This relates to business project management within Saudi Arabia.
Another is with Houston engineering firm McDermott International. It is probably because the company had contracted with Aramco in 2015 to do brownfield work in offshore Saudi Arabia. The work is ongoing. The new plan relates to the transfer of shipbuilding facilities from Dubai to a new complex in Saudi Arabia.
The kingdom has plans to attract US technology and capital. Saudi’s finance minister and the official who heads the kingdom’s main sovereign wealth fund described the plans at a conference today. Rules relating to direct investment in Saudi Arabia by foreign firms will be drawn up within a year. Khalid al-Falih, the Saudi Energy Minister, stated that “We want foreign companies to look at Saudi Arabia as a platform for exports to other markets.”
Although not on the agenda, America’s policy of increasing oil production is in direct opposes OPEC’s policy to cut production. Saudi Arabia is the largest oil producer in OPEC, which aims to reduce the current excess oil stocks and production glut. A result of this should ultimately be higher oil prices and, therefore, more income.
The Saudi Aramco – US Deals do not relate to oil production. Their main focus is the kingdom’s desire to have other irons in the fire. The current oil glut and low prices do not help a purely oil-based economy.
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