United States and Saudi Arabia companies have signed business deals worth billions of dollars during a visit by President Donald Trump.
National oil firm Saudi Aramco said it signed $50 billion of agreements with U.S. firms. Energy minister Khalid al-Falih said deals involving all companies totaled over $200 billion, many of them designed to produce things in Saudi Arabia that had previously been imported.
Business leaders on both sides were keen to demonstrate their talks had been a success, so there was an element of showmanship in the huge numbers. Some deals had been announced previously; others were memorandums of understanding that would require further negotiations to materialize.
Nevertheless, the deals illustrated Saudi Arabia’s hunger for foreign capital and technology as it tries to reduce its dependence on oil exports. Low oil prices in the past couple of years have slowed the economy to a crawl and saddled the government with a big budget deficit.
“We want foreign companies to look at Saudi Arabia as a platform for exports to other markets,” Falih told a conference attended by dozens of U.S. executives.
In March, Saudi Arabia’s King Salman toured Asia and his delegation signed similar agreements worth tens of billions of dollars there, including deals worth as much as $65 billion in China.
FUNDSEven as it sought U.S. investment on Saturday, Riyadh made two announcements on plans to deploy its own financial reserves for projects that would cement economic ties with the United States.
The Public Investment Fund, Riyadh’s main sovereign wealth fund, and U.S. private equity firm Blackstone said they were studying a proposal to create a $40 billion vehicle to invest in infrastructure projects, mainly in the United States.
The vehicle would obtain $20 billion from the PIF and with additional debt financing, might invest in over $100 billion of infrastructure projects – a political boon to Trump, who has said he wants to rebuild crumbling U.S. infrastructure.