US, Saudi firms sign tens of billions of dollars of deals as Trump visits

RIYADH: US and Saudi Arabian companies signed business deals worth tens of billions of dollars during a visit by US President Donald Trump, as Riyadh seeks help to develop its economy beyond oil.

National oil firm Saudi Aramco said it signed US$ 50 billion of agreements with US firms. Energy minister Khalid al-Falih said deals involving all companies totaled over US$ 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 US 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 US$ 65 billion in China.

Even as it sought US investment, Riyadh made two announcements on plans to deploy its own financial reserves for projects that would cement economic ties with the US.

The Public Investment Fund ( PIF), Riyadh’s main sovereign wealth fund, and US private equity firm Blackstone said they were studying a proposal to create a US$ 40 billion vehicle to invest in infrastructure projects, mainly in the US.

The vehicle would obtain US$ 20 billion from the PIF and with additional debt financing, might invest in over US$ 100 billion of infrastructure projects - a political boon to Trump, who has said he wants to rebuild crumbling US infrastructure. — Reuters