• 1 hour Rosneft Signs $400M Deal With Kurdistan
  • 4 hours Kinder Morgan Warns About Trans Mountain Delays
  • 10 hours India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 15 hours Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 19 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 1 day Conflicting News Spurs Doubt On Aramco IPO
  • 1 day Exxon Starts Production At New Refinery In Texas
  • 1 day Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 3 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 6 days Trump Passes Iran Nuclear Deal Back to Congress
  • 6 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 6 days Europe Braces For End Of Iran Nuclear Deal
  • 7 days Renewable Energy Startup Powering Native American Protest Camp
  • 7 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 7 days India Needs Help To Boost Oil Production
  • 7 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 7 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 7 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 7 days District Judge Rules Dakota Access Can Continue Operating
  • 8 days Surprise Oil Inventory Build Shocks Markets
Alt Text

This Key Data Points At Strong U.S. Oil Demand

U.S. Gasoline prices haven’t risen…

Alt Text

Oil Fundamentals Overturn Geopolitical Risk

Geopolitical risk from Iraq and…

Alt Text

Footloose Iraq Cannibalizes Saudi Market Share

OPEC’s de-facto leader Saudi Arabia…

Saudi Cabinet Green Lights $141B Oil Diversification Plan

Riyad Saudi Arabia

Late Monday, the Saudi Arabian cabinet gave its approval to the National Transformation Program, a plan aimed at diversifying the kingdom’s economy and steering it away from oil.

The plan which is aimed at boosting the country’s non-oil revenue to US$141 billion, by the year 2020, was proposed in April by Deputy Crown Prince Mohammed bin Salman. The prince said his hope was that in 20 years the country would no longer be oil-dependent.

Saudi Arabia will maintain its output of 12.5 million barrels per day until 2020.

The kingdom is dependent on oil for 80 percent of its revenue and has felt the sting that has come with falling oil prices. A 70-percent dip in prices from 2014-2016 resulted in a US$98 billion budget deficit for the kingdom last year. Related: Does Iran Have The Upper Hand In OPEC Oil War

In response to this situation, the Saudi government has issued domestic bonds, cut spending and raised the domestic cost of fuel, water and electricity.

Last month, the International Monetary Fund (IMF) predicted slow growth for the country this year, due to the effects of cheap oil.

While the country still has nearly $600 billion in foreign-exchange reserves, it has burned through US$140 billion in reserves since the end of 2014. The IMF has warned the Saudis that they could eventually run out of cash. In April, the kingdom raised US$10 billion via a loan from local banks, and in 2014 it tapped the local bond market for at least $4 billion. However, this marks the first time Saudi Arabia has issued international bonds which could total between US$10 and US$15 billion. Related: U.S. Crude Exports Hit 96 Year High

Part of the divestment plan would involve the sale of less than 5% of state-owned Saudi Arabian Oil company, and the transfer of the company’s ownership to the sovereign-wealth fund.

According to the Wall Street Journal, Saudi Arabia also plans to develop its mining and tourism industries, adding approximately 450,000 private sector jobs.

By Lincoln Brown for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News