Saudi Arabia raises $12.5bn in new bond sale

The Kingdom is pursuing many economic and social reforms, and this week said it will end a ban on women driving. (Reuters)
Updated 29 September 2017
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Saudi Arabia raises $12.5bn in new bond sale

RIYADH: Saudi Arabia on Thursday announced it had undertaken another multibillion-dollar bond sale to finance a persistent budget deficit left by low oil prices.
The world’s top crude oil exporter raised $12.5 billion in its third international bond issue, the Finance Ministry said.
It comes as Saudi Arabia pursues economic and social reforms including this week’s announcement that it will end a ban on women driving.
The Kingdom has already undertaken three “sukuk” Islamic bond issues this year — including one international sale — totalling around $15 billion.
Last year it raised $17.5 billion in its first global bond issue — the largest ever by a single country. Previously it had sold domestic bonds.
The latest issue was heavily oversubscribed with orders worth $40 billion, according to the Finance Ministry.
A slump in global oil prices resulted in massive budget shortfalls in 2014.
Saudi Arabia has posted a budget deficit in each of the past three years and is headed for a fourth year in the red in 2017.
The Kingdom’s deficit topped $200 billion from 2014 to 2016, and it is forecast to post a $53 billion shortfall this year.
Riyadh has also withdrawn more than $230 billion from its fiscal reserves since the end of 2014 to finance the budget deficit. Its reserves now stand at just over $490 billion.
Economic growth in Saudi Arabia is expected to hit just 0.1 percent this year, the weakest since 2009, according to the International Monetary Fund.
The Kingdom is due to introduce its first value-added tax (VAT) in early 2018 and is preparing to sell just under five percent of energy giant Aramco next year.


Saudi Aramco to invest in refinery-petrochemical project in east China

Updated 18 October 2018
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Saudi Aramco to invest in refinery-petrochemical project in east China

  • This is the third such project in China that Saudi Aramco has set its sight on
  • Last month, Saudi Aramco signed a long-term deal with the Zhejiang project’s operator Zhejiang Rongsheng to supply crude oil

ZHOUSHAN, China/SINGAPORE: State oil giant Saudi Aramco signed an agreement on Thursday to invest in a refinery-petrochemical project in eastern China, part of its strategy to expand in downstream operations globally.
The memorandum of understanding between the company and Zhejiang province included plans to invest in a new refinery and co-operate in crude oil supply, storage and trading, according to details released by the Zhoushan government after a signing ceremony in the city south of Shanghai.
Zhejiang Petrochemical, 51 percent owned by textile giant Zhejiang Rongsheng Holding Group, is building a 400,000-barrels-per-day refinery and associated petrochemical facilities that was expected to start operations by the end of this year.
This is the third such project in China that Saudi Aramco has set its sight on as it seeks to lock in long-term outlets for its crude oil and produce fuel and petrochemicals to meet rising demand in Asia and cushion the risk of a slowdown in oil consumption.
Last month, Saudi Aramco signed a long-term deal with the Zhejiang project’s operator Zhejiang Rongsheng to supply crude oil.
The oil giant had not yet finalized the size of its stake in the project and still needed to complete due diligence, Aramco’s Senior Vice President of Downstream, Abdulaziz Al-Judaimi, said on the sidelines of the event.
Saudi Aramco expects to supply 170,000 barrels per day of Saudi crude to the refinery in Zhoushan when it starts operations, he said.
The first crude carrier supplying the refinery should arrive in December or January, depending on when the project starts, he added.
Aramco also owns part of the Fujian refinery-petrochemical plant with Sinopec and Exxon Mobil Corp, and has plans to build a 300,000-bpd refinery with China’s Norinco. It is also in talks with PetroChina to invest in a refinery in Yunnan.