American companies will open new plants in Saudi Arabia
The state oil company of Saudi Arabia Saudi Aramco intends to sign agreements with at least 10 US companies during the visit of US President Donald Trump to the kingdom this month. This is reported by Bloomberg referring to its competent sources.
It is expected, that the agreements will be signed on May 20. According these contracts, US companies will open new plants in Saudi Arabia, and they will also train local staff. It is reported, that through these contracts Aramco plans to increase by 2021 the share of oil and gas equipment of local production to 70% by 2021. Probably, Aramco will also sign an additional agreement on the creation of a joint venture (JV) with Jacobs Engineering for project management.
Also, Bloomberg points out, that neither Aramco nor representatives of companies such as Baker Hughes, McDermott, Halliburton and Jacobs did not comment on the merits of the case. As well as other companies - GE, Schlumberger, Weatherford, Nabors, Rowan and KBR.
Recall also, that Saudi Arabia expects, that oil exports next year will bring to its treasury 127 billion dollars. That is 46% (almost 1,5 times!) more than in the financial year 2016. This follows from the draft state budget-2017.
Obviously, Riyadh expects a serious rise in oil prices through the implementation of agreements on a global decline in oil production.
The problem of the budget deficit is acute in front of Saudi Arabia since last year. Because of the low oil prices, the royal treasury expenditures in 2015 exceeded revenues by almost 100 billion dollars. In 2016, the deficit was expected at a rate of 90 billion dollars.
Of course, Saudi Arabia is taking financial rehabilitation measures. In October, the Kingdom organized the placement of government bonds for a total of 17,5 billion dollars. In 2018, the privatization of 5% of the state-owned oil corporation Saudi Aramco is planned, which will bring in treasury about another 100 billion dollars.