Aramco lifts spending plans to $414bn over next decade

Saudi Aramco CEO Amin Nasser, pictured here in 2016, said the state oil firm is ‘into so many sectors now.’ (Reuters)
Updated 13 December 2017
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Aramco lifts spending plans to $414bn over next decade

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


Audi CEO detained in diesel emissions case

Updated 2 min 54 sec ago
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Audi CEO detained in diesel emissions case

BERLIN: German authorities on Monday detained the chief executive of Volkswagen’s Audi division, Rupert Stadler, as part of a probe into manipulation of emissions controls.
The move follows a search last week of Stadler’s private residence, ordered by Munich prosecutors investigating the manager on suspicion of fraud and indirect improprieties with documents.
“Audi CEO Rupert Stadler was provisionally arrested this morning,” the company said in a statement. It said shortly afterward that a judge had ordered him kept in custody pending possible charges at prosecutors’ request.
The company said that it couldn’t comment further due to the ongoing investigation, but stressed that “the presumption of innocence remains in place for Mr. Stadler.”
German news agency dpa reported that prosecutors decided to seek Stadler’s arrest due to fears he might try to evade justice. A former head of Audi’s engine development unit is already in investigative detention.
A total of 20 people are under suspicion in the Audi probe, which focuses on cars sold in Europe that were believed to be equipped with software which turned emissions controls off during regular driving.
Volkswagen has pleaded guilty to criminal charges in the United States and nine managers, including former CEO Martin Winterkorn, were charged there. Two are serving prison terms; Winterkorn and the others remained in Germany and are unlikely to be extradited.
Audi said in a statement last week that it was “cooperating with the authorities” in the probe.
Volkswagen shares were down 2.1 percent at 157.66 euros in Frankfurt trading.