• 5 minutes Mike Shellman's musings on "Cartoon of the Week"
  • 11 minutes Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 17 minutes WTI @ 67.50, charts show $62.50 next
  • 12 hours The Discount Airline Model Is Coming for Europe’s Railways
  • 1 min Pakistan: "Heart" Of Terrorism and Global Threat
  • 1 day Newspaper Editorials Across U.S. Rebuke Trump For Attacks On Press
  • 5 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 5 hours Venezuela set to raise gasoline prices to international levels.
  • 1 day Batteries Could Be a Small Dotcom-Style Bubble
  • 58 mins Renewable Energy Could "Effectively Be Free" by 2030
  • 17 hours Saudi Fund Wants to Take Tesla Private?
  • 1 day Starvation, horror in Venezuela
  • 18 hours Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 1 day France Will Close All Coal Fired Power Stations By 2021
  • 1 day Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 10 hours Corporations Are Buying More Renewables Than Ever
Alt Text

U.S. Drillers Add Double Digit Oil, Gas Rigs

Despite the correction in oil…

Alt Text

Is Nigeria’s Oil Industry On The Road To Recovery?

Throughout the spring and summer…

Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Trending Discussions

Saudis Turn To Capital Markets For $10 Billion Loan

Saudis Turn To Capital Markets For $10 Billion Loan

Saudi Arabia is seeking a $10 billion loan from international banks, according to Reuters, which represents the country’s first major loan in more than a decade.

The Saudi government is hoping to discuss the matter with several unnamed banks, and while the amount was also not disclosed, a source told Reuters that it could top $10 billion. Related: In Risky Move Wall St. Backs Shale With Nearly $10 Billion In Equity

To be sure, Saudi Arabia has a massive pile of foreign exchange that will allow it to weather the oil price downturn for years, although few expect oil prices to remain below $40 for that long. Still, the Saudi government surely does not want to burn through all of its cash reserves. In fact, Saudi reserves dropped below $600 billion for the first time in almost four years. The OPEC member burned $14.3 billion in January, the third month in a row that it used more than $10 billion. Is recently as the summer of 2014, Saudi Arabia’s foreign exchange sat well above $700 billion.

With oil prices so low, Saudi Arabia estimated in late 2015 that it ran a budget deficit of $98 billion for the year. The trajectory is unsustainable. S&P downgraded Saudi Arabia’s credit by two notches in February, from A+ to A-. Related: The U.S. Still Dominates World Oil Prices

It now appears that the Saudi government wants to turn to international lenders to help plug the budget hole. As one of the world’s largest oil producers with a huge war chest of cash reserves, Saudi Arabia shouldn’t have trouble finding any lenders. Not only that, but Reuters says that banks might be eager to lend to Saudi Arabia because it could improve their chances of being selected to conduct the bond offering that Saudi Arabia is planning on holding later this year.

Still, borrowing costs will likely be much higher than what would have been offered a year or two ago. For example, Qatar took a $5.5 billion loan from international lenders in January, much lower than the expected $10 billion that was anticipated, reportedly because the offered interest rates were too high.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment
  • Brett Miller on March 03 2016 said:
    Really? That's like saying my business has $600,000 in the bank but I want to borrow $10,000. And I have the ability to manipulate my business market sector such that I could increase my revenue stream per unit by 200% to 300% any time I want. Talk about having your cake and eating it too!

Leave a comment




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