Saudi Arabia might be built on petrodollars, it might be soon looking for an alternative. According to the Financial Times, the Kingdom is on the hunt for oil and gas abroad.
While Saudi Arabia has declared it would decrease its hydrocarbons production, it is already eyeing on foreign countries’ resources. Saudi Arabia currently owns the biggest energy company in the world called Saudi Aramco.
As Saudi Arabia is one of the wealthiest countries in the world, its plan to develop internationally might create thousands of jobs – while potentially hindering the environment.
“The world will be our playground”
A week ago, Financial Times’ David Sheppard interviewed the Saudi energy minister Khalid al Falih. As Saudi Arabia is the first oil exporter in the world, the country’s strategy for the upcoming years has been the talk of the town.
EXCLUSIVE: Saudi Arabia goes on the hunt for global oil and gas, with plans to develop full-scale international exploration and production business for first time- full interview with Khalid al Falih https://t.co/I4feQpIkRZ via @financialtimes #OOTT with @AnjliRaval,
— David Sheppard (@OilSheppard) February 12, 2019
“When asked if Saudi Arabia plans to become an international energy player like Royal Dutch Shell or Exxon Mobil, pumping oil as well as gas overseas, Mr Falih said: “Correct. The world is going to be Saudi Aramco’s playground.”, wrote Sheppard.
Financial Times’ story however caught the attention of the public eye, as the energy minister did not mention green energies, only to say the kingdom would look abroad to find oil and gas.
Oil production is dropping
Oil production was living its all-time high in Saudi Arabia last year. But this year, the country is planning big production and export cuts in March with 500,000 barrels a day.
EXCLUSIVE: Saudi planning big production and export cuts in March, 500,000 b/d below Opec target
"Mr Falih said that in March the kingdom would reduce production to near 9.8m barrels a day, from above 11m b/d in November. Exports would also fall to near 6.9m b/d" #OOTT
— David Sheppard (@OilSheppard) February 12, 2019
This would be way below Opec target. According to the Financial, energy minister Khalid al Falih said that in March the kingdom would reduce production to near 9.8 million barrels a day, from above 11 million barrels a day last November.
Exports are also planned to fall to near 6.9 million barrels a day. Experts know that a shift to alternative energy resources is imminent.
While the kingdom is trying to find deals with foreign countries, it has leaned in a tense situation.
A delicate diplomatic situation
Last October, Jamal Khashoggi, a journalist from the U.S newspaper The Washington Post was assassinated at the Saudi Arabian consulate in Istanbul by agents of the Saudi government.
Since then, tensions have risen between western countries and the Arabic kingdom, who was trying to put on a new face for years, giving the right for women to drive, as well as appointing a new prince, Mohammad Bin Salman Al Saudi.
While the Washington Post is still investigating on the death of its own journalist, the CIA released a statement confirming that the prince himself ordered the execution of Jamal Khashoggi.
The fiancée of murdered Saudi journalist Jamal Khashoggi greeted journalists on her way out of a meeting with MEPs, where they discussed the human rights situation in the Arab Peninsula. pic.twitter.com/8PSZIWzzJk
— DW Europe (@dw_europe) February 19, 2019
This week, Jared Kushner, Senior Advisor of the President of the United States plans to meet with Crown Prince Mohammed bin Salman. It will be the first time the two will meet since “15 individuals brutally strangled Washington Post journalist Jamal Khashoggi and dismembered him”, reported Vanity Fair.
As business with the West seems compromised for now, the kingdom is looking forward to negotiating with China, which might turn to be the sweet deal it expected.
Will China save Saudi Arabia’s plans?
Before meting with Kushner, the Middle Eastern Prince will travel to Asia this week, where he is expected to meet with Chinese Vice Premier Han Zheng on Friday morning and sitting down with President Xi Jinping in the afternoon.
— China Xinhua News (@XHNews) February 22, 2019
Two years ago, his father met with the Chinese government. According to the Chinese state media Xinhua, both countries agreed to “step up cooperation in all areas”.
According to experts, this Asian trip was strategically put in the Prince’s calendar right before his meeting with Jared Kushner in order to restore the kingdom’s reputation and viability.
Although the killing of the Washington Post’s journalist has raised vivid tensions between the two countries, the United States remains one of the key markets of the kingdom.
Last year, imports from Saudi Arabia in the United States reached $46 billion.
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