Saudi tourism outstrips overall economic growth in Kingdom

A tourist listens to a Saudi guide at the Mada’in Saleh archaeological site. The travel sector grew four times faster than the wider economy last year. (AP)
Updated 23 March 2018

Saudi tourism outstrips overall economic growth in Kingdom

LONDON: The KSA travel and tourism sector grew four times faster than the wider economy in 2017, according to a report released by the World Travel and Tourism Council (WTTC), on Thursday.
The total contribution of travel and tourism to GDP was SR240.9 billion ($64.2 billion), or 9.4 percent of GDP in 2017.
It is forecast to jump again this year, underscoring the sector’s increasingly important role in the country’s economic evolution, the WTTC said.
With government investment fueling rapid growth in the sector, the tourism economy is projected to grow to almost SR400 billion ($107 billion) over the next ten years.
“Tourism is really being put up as a pillar in the future Saudi economy,” said WTTC Research Director Rochelle Turner.
“It’s very interesting to see the many developments there at the moment, from the building of infrastructure … to some of the changes in the structure and regulations that have taken place.”
The Kingdom has been courting overseas investment as part of a strategy to bolster the contribution of tourism to a diversified national economy under the country’s Vision 2030 blueprint for economic and social transformation.
Recently, the government-owned Public Investment Fund (PIF) pumped SR10 billion into an entertainment investment company to develop the country’s leisure infrastructure and create an estimated 22,000 jobs by 2030.
Last year the travel sector accounted for 644,000 jobs in the Kingdom, amounting to 5.3 percent of total employment.
At present it is predicted to drop by 1 percent in 2018 before rising by 1.6 percent per annum to 2028. Turner attributed this drop to the “increase in the number of jobs available” as the country shifts from an oil economy to a more diversified future.

Russia vows cooperation with OPEC to keep oil market balanced

Updated 21 November 2019

Russia vows cooperation with OPEC to keep oil market balanced

  • Moscow not aiming to be world’s No.1 crude producer, Putin tells annual investment forum

MOSCOW: President Vladimir Putin said on Wednesday that Russia and the Organization of the Petroleum Exporting Countries (OPEC) have “a common goal” of keeping the oil market balanced and predictable, and Moscow will continue cooperation under the global supply curbs deal.

OPEC meets on Dec. 5 in Vienna, followed by talks with a group of other exporters, including Russia, known as OPEC+.

“Our (common with OPEC) goal is for the market to be balanced, acceptable for producers and consumers and the most important — and I want to underline this — predictable,” Putin told a forum on Wednesday.

In October, Russia cut its oil output to 11.23 million barrels per day (bpd) from 11.25 million bpd in September but it was still higher than a 11.17-11.18 million bpd cap set for Moscow under the existing global deal. Putin told the forum that Russia’s oil production was growing slightly despite the supply curbs deal but Moscow was not aiming to be the world’s No. 1 crude producer. Currently, the US is the world’s top oil producer.

“Russia has a serious impact on the global energy market but the most impact we achieve (is) when working along with other key producers,” he said. “There was a moment not that long ago when Russia was the world’s top oil producer — this is not our goal.”

Russia plans to produce between 556 million and 560 million tons of oil this year (11.17-11.25 million bpd), Energy Minister Alexander Novak said separately on Wednesday, depending on the volume of gas condensate produced during cold months.

Russia will aim to stick to its commitments under the deal in November, Novak told reporters.

Russia includes gas condensate — a side product also known as a “light oil” produced when companies extract natural gas — into its overall oil production statistics, which some other oil producing countries do not do.

As Russia is gradually increasing liquefied natural gas production (LNG), the share of gas condensate it is producing is also growing. Gas condensate now accounts for around 6 percent of Russian oil production.

Novak told reporters that in winter, Russia traditionally produces more gas condensate as it is launching new gas fields in the freezing temperatures.

“We believe that gas condensate should not be taken into account (of overall oil production statistics), as this is an absolutely different area related to gas production and gas supplies,” he said.

Three sources told Reuters on Tuesday that Russia is unlikely to agree to deepen cuts in oil output at a meeting with fellow exporters next month, but could commit to extend existing curbs to support Saudi Arabia.

On Wednesday, Novak declined to say that Russia’s position would be at upcoming OPEC+ meeting. Reuters uses a conversion rate of 7.33 barrels per ton of oil.