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GE has closed preliminary agreements with Riyadh on a number of projects worth a collective US$15 billion, the company said. GE’s Vice Chairman John Rice traveled with President Trump on his first visit abroad, to Saudi Arabia. According to him, the deals will help Saudi Arabia with its Vision 2030 economic diversification program.
In a press release, GE said that about US$7 billion of the total investments will be dedicated to technology and solutions specifically from GE, including the company’s cloud-based data analytics platform Predix. The agreements involve the power and oil and gas sectors, among others.
The Vision 2030 program was conceived by Deputy Crown Prince Mohammed bin Salman in a bid to move the Kingdom away from oil and make it more resilient to price shocks like the one from 2014. One aspect of the program involves greater reliance on renewable energy, with the ambition to make the country a regional leader in renewable energy generation.
Another aspect of the diversification program is turning Saudi Arabia from an arms importer to an arms producer. Last week, the country’s sovereign wealth fund set up a company to that end, Saudi Arabian Military Industries. At the same time, over the weekend President Trump and King Salman inked a US$110-billion U.S. arms import deal.
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Meanwhile, OPEC’s largest producer is moving ahead with an output cut extension meant to bring global oil supplies within the limits of the five-year average range, which the cartel considers a balanced market. There are reports that the cuts may be deepened, but Saudi Arabia’s top oilman Khalid al-Falih told media that it may be enough if another one or two smaller oil producers join the cut to bring supply down and prices up.
Thanks to these reports, oil prices started the week with a rise. Brent inched above US$53 a barrel and WTI crossed back above the US$50 mark.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.