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Russia and Saudi Arabia: Finding common ground and friendship

In 1926, it was the Soviet Union that first officially recognized the sovereignty of Saudi Arabia. This laid the foundations for enduring good relations between the two nations. In 2007, Russian President Vladimir Putin made his first official state visit to the Kingdom. This time, King Salman is visiting Russia, the first ever state visit by a ruling Saudi monarch to the country.
This historic event gives additional impetus to the relationship already established by the two governments in the search for joint policies, as well as energy and investment projects. This also comes at a time of growing economic collaboration between Saudi Arabia and Russia, with a number of binding agreements expected to be signed during the visit.
Following many years of constructive dialogue and successful agreements between the world’s two leading oil producers, today Russia and Saudi Arabia are aligned in their approach to a series of key global political and economic challenges. Similarly, there is significant potential for cooperation in energy and culture.
In 2015, as a result of Crown Prince Mohammed bin Salman’s visit to Russia and his meeting with Putin at the St. Petersburg International Economic Forum, the Russian Direct Investment Fund (RDIF) established a partnership with the Saudi Public Investment Fund (PIF), which committed to invest $10 billion in Russian projects — to date the largest investment commitment for projects in Russia.
Under this agreement, both countries focus on joint investment in agriculture, medicine, retail, logistics and real estate, with projects spanning a four-to-five-year period. Investments made by the PIF and RDIF to date have outperformed the major indices, and there are a number of promising new joint projects in the pipeline. At least seven deals have already been finalized, valued at close to $1 billion.
The RDIF is Russia’s champion in developing the business partnership with Saudi Arabia, and this partnership is crucial for the future prosperity of our two countries. Energy and oil are a natural fit for Russia and Saudi Arabia, both at the state and company levels.

Russia and Saudi Arabia share many values and cultural interests, and we look forward to continuing to develop new business and investment ties between our nations.

Kirill Dmitriev

The two countries, together providing about a quarter of global oil output, were the driving force behind the unprecedented production agreement between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers, which stabilized global energy markets, benefitting both suppliers and consumers.
This level of cooperation is being mirrored, and we see various ventures in these sectors, ranging from production projects to developing technology — a sure sign that governmental cooperation on energy policies is being replicated at a corporate level.
The $1 billion Russian-Saudi energy investment fund, focused on identifying attractive investment opportunities in Russian oil and gas production, will be a good example of how we can work together and further stimulate corporate alliances. 
Russia is also working with key Saudi corporations. Supported by the Saudi Arabian General Investment Authority (SAGIA), the RDIF is identifying attractive investment opportunities in the Kingdom and other Gulf countries. Agreements of this nature are providing Russian companies with the opportunity to develop home-grown operations and gain a foothold in new markets.
The RDIF-SAGIA relationship is continuing to progress. They recently announced the Russian Saudi Investment Forum to be held in Moscow on Oct. 5, to which more than 200 companies have been invited to participate, including the PIF, Saudi Aramco, Gazprom, Aeroflot, Sibur and SABIC. Since its inception, the RDIF has been committed to working with global sovereign wealth funds (SWFs) to jointly invest in projects domestically and abroad.
The close Saudi-Russian relationship has ensured that these collaborations have received broad political and economic support, and is already extremely beneficial for both countries. SWFs from the Gulf, especially from Saudi Arabia, have been an essential force in the success of the RDIF’s mission to attract long-term foreign direct investment into Russia’s economy.
The RDIF’s unique co-investment model means merging both the equity and local expertise of our international partners, simultaneously boosting Russian economic development and creating value for the partners. Throughout these years, our partnership with the PIF has come a long way. Together, we have executed deals in transport infrastructure, manufacturing, logistics and other sectors, and are actively considering more than 25 other projects.
We observe how increasingly new business and investment ties between the two SWFs are being forged. We are fully aligned with Saudi Arabia’s Vision 2030 for the PIF to become the largest and leading SWF globally. Sharing similar views with our Saudi partners, we are interested in adding value to both countries’ economies by delivering high returns via our cooperation in a wide range of sectors in Saudi Arabia and Russia.
As such, Russia is enthusiastic about working with the Kingdom to improve industry and manufacturing in line with Vision 2030. We are open to strategic partnerships advancing the trade and export capabilities of both countries. The RDIF is already committed to deepening these relationships and employing best practices.
Diverse and long-term projects are essential to further cultivating this relationship and maintaining these strategic partnerships between the two countries. King Salman’s visit is yet another reason for optimism, and marks a turning point in strengthening ties between Russia, Saudi Arabia and other Middle Eastern countries for many years to come. Russia and Saudi Arabia share many values and cultural interests, and we look forward to continuing to develop new business and investment ties between our nations.
 
Kirill Dmitriev is CEO of the Russian Direct Investment Fund, the sovereign wealth fund of the Russian Federation.