Saudi Arabia to invest in gas and petrochemical industries

Dec 30, 2003 01:00 AM

Saudi Arabia expects local and foreign investors to pump at least $ 142 bn into gas and petrochemical industries over the next 20 years as it pushes ahead with reforms to reduce dependence on unstable oil revenues. The funds are part of a staggering $ 882 bn which the world's oil superpower expects to be channelled into various sectors in the coming two decades.
Figures by the Saudi Arabian General Investment Authority (Sagia), the Kingdom's top investment body, showed around 345 bn Saudi riyals ($ 92 bn) is projected to be invested in petrochemicals within 20 years, while nearly 188 bn riyal ($ 50.13 bn) would be pumped into gas industries.

The Kingdom, which controls at least a quarter of the world's proven oil deposits, has already secured an investment of nearly $ 2.5 bn into its mammoth gas sector under a package signed last month with a consortium of global firms. More deals are expected to be struck in the near future as the government appears determined to tap its gas wealth of more than 6 trillion cm.
"Steady growth rates and the restructuring of the Saudi economy have opened up new horizons. As a result, hundreds of sectoral, regional and privatisation investment opportunities are being generated every year," Sagia said. "There are several promising economy sectors in the Kingdom with many investment opportunities for both national and foreign investors. This is especially so after the government's latest decision targeting more sectors for privatisation," it said.

The report showed the Kingdom expects a total investment of 3.3 tn riyals ($ 882 bn) to be channelled in the next 20 years into gas, petrochemicals, water and electricity, telecommunications, infrastructure, farming, housing and services. Sagia's figures showed the Kingdom has already attracted around 52.55 bn riyals ($ 14 bn) in investment since the Authority was created in April 2000.
Foreign investors from 55 countries contributed 85.1 % or around 44.78 bn riyals ($ 11.95 bn) of the total investment covering nearly 2,000 projects. The US, the top economic partner of Saudi Arabia and the main recipient of Saudi oil, is by far the biggest investor in the Kingdom with around 15.5 bn riyals ($ 4.13 bn), nearly 30 % of the total foreign capital.

Japan, another key importer of Saudi oil, was the second top investor, with nearly 11.2 bn riyals ($ 2.98 bn). It was followed by France and Britain, with around 3.84 bn riyals ($ 1.02 bn) and 2.66 bn riyals ($ 709 mm) respectively. A breakdown showed the industrial sector had the lion's share of investments, receiving 28.5 bn riyals ($ 7.6 bn). Around 23.9 bn riyals ($ 6.37 bn) are invested in services and the rest in agriculture.
At a recent investment conference, Sagia's Chairman Prince Abdullah bin Faisal bin Turki, a member of the Saudi royal family, dismissed reports that the latest spate of terror attacks could hinder the flow of investments into the Kingdom. But he stressed the need for more reforms and openness in the Kingdom's economy, which accounts for more than a fifth of the total Arab gross domestic product.

He said more sectors needed to be opened for foreign investors in order to attain the investment target and ensure the success of reforms.
"The investment market in the Kingdom should open up more drastically and at a quicker pace. There is no discrimination between foreign and domestic investors as the basis of investment is openness and provides the best climate for the investors," he said.
He was referring to the negative list which includes sectors barred for foreign investors. The list has gradually been narrowed over the past two years and officials have promised that it will eventually be repealed.

Expected capital
By sector in 20 years (billion riyals)
Electricity 430
Water 330
Telecommunications 220
Infrastructure 520
Petrochemicals 345
Gas 188
Agriculture 106
Technology and information 40
Railways 30
Housing and services 1,100

Source: SAGIA Gulf News graphic

Source: GN Online
Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« October 2020 »
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31

Register to announce Your Event

View All Events