Deals worth more than $50bn signed at KSA Future Investment Initiative

Saudi Energy Minister Khalid Al-Falih signed several of the deals announced at the FII. (Ziyad Alarfaj / AN)
Updated 23 October 2018

Deals worth more than $50bn signed at KSA Future Investment Initiative

RIYADH: At least 25 deals worth more than $50 billion have been signed at Future Investment Initiative (FII) in Riyadh.
The contracts struck on the first day of the event included what were described as 12 “mega deals.”

Among the projects announced on Tuesday in front of an audience of international bankers, investors and thought leaders, was the second phase of Haramain high-speed railway. 
The deals were struck across the energy and transportation sectors despite the boycott of the event by several company chiefs following the death of journalist Jamal Khashoggi at the Saudi embassy in Turkey earlier this month.
A number of major public transport projects, including the development of the Saudi Land Bridge project, a rail line connecting the Red Sea coast with Riyadh, were among the raft of deals signed.

Such large-scale infrastructure projects form a key part of Saudi Arabia’s Vision 2030 blueprint for economic and social diversifcation. It aims to reduce the country’s historical reliance on oil and gas revenues by investing in new industries that will also provide employment for the Kingdom’s youthful population.
Other deals were struck on Tuesday with Trafigura, Total, Hyundai, Norinco, Schlumberger, Halliburton and Baker Hughes.
Oil giant Saudi Aramco signed 15 initial agreements worth $34 billion.

Total CEO Patrick Pouyanné, told the gathering that the French oil and gas producer would announce a retail network in the Kingdom with Saudi Aramco.
The $10 billion Russian Direct Investment Fund also had a large presence at the event, led by Kirill Dmitriev.
Saudi Arabia’s Public Investment Fund (PIF), the main backer of the event, is driving the Kingdom’s economic reform agenda.
Managing director Yasir Al-Rumayyan said that the fund had invested in 50 or 60 firms via SoftBank Group’s Vision Fund and would bring most of those businesses to the Kingdom. PIF has committed to invest $45 billion in the Vision Fund.
The FII event, which debuted in the Kingdom last year, concludes on Thursday.

Saudi Arabia's Minister of Communications and IT Abdullah Al-Sawahah praised the speed at which Saudi Arabia is progressing in the digital worl, and said: "We are moving at light speed in becoming the tech hub of the region."

Meanwhile, Emirati businessman Mohamed Alabbar said: "There is so much room for technology growth and innovation in the Middle East, especially in Saudi Arabia, the UAE and the whole region." 


Oil up after drone attack on Saudi field, but OPEC report caps gains

Updated 8 min 22 sec ago

Oil up after drone attack on Saudi field, but OPEC report caps gains

LONDON: Crude oil prices rose on Monday following a weekend attack on a Saudi oil facility by Yemen’s Houthi militia and as traders looked for signs of progress in US-China trade negotiations.
Price gains were, however, capped to some degree by an unusually downbeat OPEC report that stoked concerns about growth in oil demand.
Brent crude, the international benchmark for oil prices, was up 85 cents, or about 1.4%, at $59.49 a barrel at 1225 GMT.
US West Texas Intermediate (WTI) crude futures were up $1.01, or 1.8%, at $55.88 a barrel.
A drone attack by the Iran-backed Houthi militia on an oilfield in eastern Saudi Arabia on Saturday caused a fire at a gas plant, adding to Middle East tensions, but state-run Saudi Aramco said oil production was not affected.
“The oil market seems to be pricing in again a geopolitical risk premium following the weekend drone attacks on Saudi Arabia, but the premium might not sustain if it does not result in any supply disruptions,” said Giovanni Staunovo, oil analyst for UBS.
Iran-related tensions appeared to ease after Gibraltar released an Iranian tanker it seized in July, though Tehran warned the United States against any new attempt to seize the tanker in open seas.
Concerns about a recession also limited crude price gains.
Meanwhile, China’s announcement of key interest rate reforms over the weekend has fueled expectations of an imminent reduction in corporate borrowing costs in the struggling economy, boosting share prices on Monday.
US energy firms this week increased the number of oil rigs operating for the first time in seven weeks despite plans by most producers to cut spending on new drilling this year.
“WTI in recent weeks has performed relatively better than Brent... Pipeline start ups in the United States have been supportive for WTI, while the ongoing trade war has had more of an impact on Brent,” said Warren Patterson, head of commodities strategy at Dutch bank ING.
The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market would be in slight surplus in 2020.
It is rare for OPEC to give a bearish forward view on the market outlook.
“Such a bearish prognosis will heap more pressure on OPEC to take further measures to support the market,” said Stephen Brennock of oil broker PVM.