King Salman launches investment drive with Asia tour
25 Feb 2017 - 0:10
Riyadh: The Custodian of the Two Holy Mosques King Salman bin Abdulaziz of Saudi Arabia starts a month-long Asian tour from today to build ties with the world’s fastest growing importers of Saudi oil and promote investment opportunities, including the sale of a stake in its giant state firm Saudi Aramco.
The octogenarian monarch, who has overseen the launch of an ambitious economic reform plan since his accession two years ago, is expected to visit Malaysia, Indonesia, Japan and China. In a sign of the importance which the kingdom places on strengthening economic ties with Asia, Indonesian officials say Salman will be accompanied by a 1,500-strong entourage including 10 ministers. Energy Minister Khalid Al Falih and Aramco executives will travel with him, sources told Reuters, on the king’s first trip outside the Middle East and North Africa since he visited the United States in 2015.
Saudi officials are keen to court Asian investors for the sale of a 5 percent stake in Aramco in 2018, which is expected to be the world’s biggest IPO, and have solicited financial advice from banks with links to China. Asian banks and companies are also expected to play major roles in the kingdom’s plans to develop non-oil industries and expand its international investments, all part of the crude exporting giant’s attempts to reduce dependence on oil revenues.
The kingdom in August signed 15 preliminary agreements with China - ranging from house-building in Saudi Arabia to water projects and oil storage - during a visit by the king’s powerful son, Deputy Crown Prince Mohammed bin Salman, who is spearheading the economic reform plan. It has also agreed to invest up to $45bn in a new technology fund with Japan’s SoftBank Group.
While it pushes ahead with its diversification efforts, Saudi Arabia is at the same time seeking to cement its position as the world’s biggest oil exporter and establish itself as the dominant oil supplier to Asia’s emerging markets. In China, which is challenging the United States as the world’s biggest oil consumer, Saudi has just been pipped by Russia as the top supplier.
Saudi Arabia has yet to announce Salman’s trip, but officials in Malaysia say he will start his tour there on Sunday, accompanied by his son Prince Mohammed. Aramco is expected to sign an agreement during the visit to collaborate with Malaysia’s state oil firm Petroliam Nasional Bhd (Petronas) on its Refinery and Petrochemical Integrated Development project.
The king will travel to Jakarta and Bali in Indonesia from March 1-9, and Japan from March 12 to 14, officials in those countries said. Indonesian Cabinet Secretary Pramono Anung said the government hopes the visit will bring Saudi investments of up to $25bn.