Russia’s RDIF to boost investment deals in Saudi Arabia

Kirill Dmitriev CEO of Russian Direct Investment Fund attends the Future Investment Initiative last year. (AFP)
Updated 18 January 2019

Russia’s RDIF to boost investment deals in Saudi Arabia

  • Fund's CEO Kirill Dmitriev leads a delegation of more than 20 Russian business figures to the Kingdom
  • The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services

RIYADH: Russian sovereign wealth fund RDIF said on Wednesday it would significantly boost its investments deals with Saudi Arabia in 2019.

The fund’s CEO Kirill Dmitriev led a delegation of more than 20 Russian business figures to the Kingdom to discuss new projects.

Saudi Energy Minister Khalid Al-Falih met Dmitriev in Riyadh and expressed his happiness on the progress they made in the talks and the cooperation between the two countries. 

“Its not only commercial cooperation, but we are also working on scientific research, and we have opened a research center in Moscow University,” Al-Falih said.

The minister said the Russian delegation will also meet officials from Saudi Basic Industries Corporation SABIC and mining company Ma’aden among other companies during their three day visit to the Kingdom.

The delegation discussed projects in oil refining, petrochemical, gas chemical and oilfield services sectors, a Russian Direct Investment Fund statement said.

Al-Falih added that the Russian side has started a rubber plant project in Al-Jubail with Total and Novomet.

RDIF already has a $10 billion investment partnership with the Saudi Public Investment Fun (PIF), with more than $2 billion already invested in projects.

“We extend our cooperation not only on oil cuts but to cooperate in oil services, technology, LG and petrochemicals,” Dmitriev said. “We believe Saudi Aramco can be one of the greatest partners of Russia.”

The CEO said they were continuing to cooperate with PIF in Saudi Arabia through a number of energy investments.

Russian companies are also keen to invest in the Kingdom’s planned $500 billion mega-city NEOM.

“We have companies that have interest to invest in NEOM, we would like to build a port in NEOM, it can be a big port,” Dmitriev said.


OPEC and its allies meet to discuss oil output cuts

Updated 06 June 2020

OPEC and its allies meet to discuss oil output cuts

  • The meeting, originally scheduled for next week, was brought forward to Saturday

VIENNA: OPEC and its allies were holding talks via video conference Saturday to assess their current deal to slash production as oil prices tentatively recover on easing coronavirus lockdowns.
The 13-member group and other oil producing nations such as Russia and Mexico are discussing an agreement reached in April to boost prices, which have plummeted over falling demand as countries around the world have imposed strict lockdowns to stop the spread of the new coronavirus.
The meeting, originally scheduled for next week, was brought forward to Saturday at the suggestion of Algerian Oil Minister Mohamed Arkab, who currently holds the rotating presidency of the Organization of Petroleum Exporting Countries.
Under the terms of the April agreement, OPEC and the so-called OPEC+ pledged to cut output by 9.7 million barrels per day (bpd) from May 1 until the end of June.
The reductions would then be gradually relaxed from July, with 7.7 million bpd taken off the market from July to December.
But at Saturday’s talks, crude producers were expected to discuss extending the 9.7 million bpd beyond June, even if agreement might prove difficult to reach.
The April deal was signed after days of wrangling between major players, whose revenues have been ravaged by the collapsing oil market this year.
“It seems very likely the May-June cuts will be extended by another month,” said Bjornar Tonhaugen, analyst at Rystad Energy.
Some market observers are expecting the cuts to be extended still further, possibly until the end of the summer or even until the end of the year.
Although more countries around the world are gradually moving out of lockdown, crude consumption has not returned to pre-confinement levels, which had already been comparatively low.
As in previous negotiations, discussions could prove particularly tense between Russia and Saudi Arabia, the deal’s two heavyweights who became involved in a short but bitter price war when previous talks broke down in March.
Mexico, which held up the April deal before it was eventually finalized, has also already ruled out any further drop in oil production with its president, Andres Manuel Lopez Obrador, saying on Friday his country “could not adjust our production further.”
Another major bone of contention could be the willingness of each country to abide by the agreed production quotas, suggested RBC analyst Al Stanton.
According to data intelligence company Kpler, OPEC+ reduced output by around 8.6 million bpd in May, a smaller cut than planned, with Iraq and Nigeria seen as the main culprits.
Nigeria’s Ministry of Petroleum Resources said in a tweet Saturday that it backed discussions to allow countries which failed to conform fully to the agreed cuts in May and June to make up for it in July, August and September
Despite the difficulties, the output cuts have helped support oil prices, which rose to around $40 per barrel at the start of June for both the US benchmark, West Texas Intermediate (WTI), and Europe’s Brent North Sea contracts.
Around April 20, both had slumped to historic lows, with Brent falling as low as $15 and WTI even entering negative territory.