Saudi Arabia to spend $27 billion on industry uplift

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Saudi Arabia to spend $27 billion on industry uplift
Khaled Al Falih attends the National Industrial Development and Logistics Programme in Riyadh on Monday.

riyadh - The programme offers investment opportunities in mining, industry, logistics and energy sectors

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Published: Mon 28 Jan 2019, 6:32 PM

Last updated: Mon 28 Jan 2019, 11:14 PM

The Saudi Arabian government will spend SR100 billion ($27 billion) in 2019 and 2020 as part of its industrial development programme, Aabed Abdullah Al Saadoun, Deputy Minister of Energy, Industry and Mineral Resources said on Monday.

The programme offers investment opportunities in mining, industry, logistics and energy sectors inside the kingdom, according to a document distributed to participants at an investment conference the deputy minister was addressing in Riyadh.

The programme offers investors the opportunity to invest in projects such as plants that manufacture rubber, catalysts and vehicles, it said.

Saudi Arabia's 2019 budget allocated SR33 billion for the energy, industry, mining and logistics sectors, Energy Minister Khalid Al Falih said in a tweet in December.

That is more than three times the amount allocated in the previous budget, he said, in a sign the kingdom is keen to boost diversification in these key sectors to create jobs for Saudis and wean its economy off oil.

Al Arabiya TV claimed that agreements worth SR235 billion ($63 billion) were signed on Monday on the sidelines of a Saudi Arabian industrial development conference in Riyadh. No details were available on the nature of the agreements signed.

$2.8b metal smelter
Saudi Arabia signed an agreement to build a metal smelter with global commodities trader Trafigura worth $2.8 billion, according to a statement reviewed by Reuters on Monday.

The project with Trafigura Singapore will be the first copper smelter in a GCC country and it aims to produce 400,000 tons of copper, 200,000 tonnes of zinc and 55,000 tons of lead annually.

$1.6 bet on Hyundai Oilbank
Meanwhile, Saudi Aramco plans to invest up to $1.6 billion for a nearly 20 per cent stake in South Korean refiner Hyundai Oilbank, expanding its foothold in one of its biggest Asian buyers of crude oil.

Saudi Aramco is already the biggest shareholder in South Korea's No 3 refiner, S-Oil Corp, with a 63.4 per cent stake, and the latest deal should help Aramco boost crude oil sales to Hyundai Oilbank, the South's smallest refiner by capacity.

Saudi Arabia is the top crude oil supplier to South Korea, the world's fifth-biggest importer.

In 2018, South Korea imported 323.17 million barrels of crude from the kingdom, or 885,408 barrels per day (bpd), according to data from Korea National Oil Corp.

Saudi Aramco's chief executive told Reuters in November that it planned to expand its market share in Asia - including China, India, Malaysia and Indonesia - and Africa.

Saudi Aramco said it plans to buy a stake of up to 19.9 percent of Hyundai Oilbank from Hyundai Heavy Industries Holdings, which now owns 91.13 per cent of Hyundai Oilbank.

"Saudi Aramco seems to be boosting investments in downstream projects ahead of an initial public offering," said Lee Dong-wook, an analyst at Kiwoom Securities.

Saudi Energy Minister Al Falih said in early January that the state oil giant would be listed by 2021.

Aramco, the world's largest crude producer, plans to increase investment in refining and petrochemicals in a bid to cut its reliance on crude as demand for oil slows.

Hyundai Oilbank has a total of 650,000 barrels per day of refining capacity in the southwestern city of Daesan and also aims to expand its petrochemical business. - Reuters

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