Wave of deals expected during Trump’s Saudi visit

The United States president Donald Trump arrives in Riyadh tomorrow with a full business agenda and his trip is expected to be marked by a raft of economic deals including in the energy sector.

After meeting King Salman and attending a formal banquet, the US leader’s first day includes a signing ceremony of several agreements that will “further solidify US-Saudi security and economic cooperation,” according to a joint government press release.

The deals themselves will cover arms, energy and assorted financial investments.

“The Saudis need the US as a senior partner in its Vision 2030 reform plan,” said a former top economic adviser to a pan-Arab financial organisation, who did not want to be named as he now works for a private Abu Dhabi enterprise.

“They are going to need much guidance on, for example, the financialisation of the banking system, on syndicated loans, deepening their capital markets and in the hydrocarbon sector, which they are opening up more,” the economist said.

There are expected to be about 10 oil sector deals signed during the visit, between the state oil company Saudi Aramco and US oil services companies including Schlumberger, Halliburton, McDermott International, Nabors Industries, Rowan Companies and others, according to oil industry sources.

Aramco made no comment, as is its usual policy.

Beyond the oil services contracts, the US Secretary of State, ExxonMobil’s former chief Rex Tillerson, who knows the Saudi establishment well, will be urging the Saudis to open their oil sector further as part of the Vision 2030 liberalising agenda.

ExxonMobil, Chevron and Dow Chemicals already are major partners on downstream domestic ventures in Saudi Arabia, which is an area the kingdom is looking to expand both domestically and abroad.

But US oil interests are also pushing for opportunities in the upstream beyond services contracts, which may include taking a stake in the state oil company when it is partially privatised next year.

Last month, Saudi Basic Industries said the company and its partner ExxonMobil said they would build a 1.8 million tonnes a year petrochemicals plant in San Patricio County, Texas, creating up to 3,500 jobs.

Aramco also recently completed the takeover of its Motiva joint venture refining company in the US to become the sole owner of plants that include the country’s largest refineries at Port Arthur, Texas.

amcauley@thenational.ae

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