Saudi Arabia has made no secret of the fact that they’re seeking to diversify its economy so that they’re better able to weather the oil slide that’s chopped revenues in half over the past two years. However, that strategy doesn’t mean that the Kingdom is abandoning its cornerstone industry over the next decade.
That was made evident by the announcement from Saudi Aramco on September 26 that the company will be spending $334 billion through 2025 to not only foster projects but also create new facilities for the production of oil. A portion of this amount will focus on research and development, some will go toward exploration and other areas will address things like infrastructure and support services.
Abdulaziz al-Abdulkarim, a Saudi Aramco executive, made the announcement during a conference in Bahrain. That preceded an OPEC meeting on September 28 that crafted an agreement between 14 of the organization’s members to cut production of crude oil in order to stimulate the market.
Saudi Aramco, which serves as a business arm of the Kingdom, has stated that they’ll consider foreign companies to help them achieve these goals. Still, one of the key factors in the awarding of contracts will be connected to a company’s ability to help the Saudi economy grow. That’s a clear indication that the hiring of domestic workers will take precedence over the importation of foreign personnel.
This latest strategic gambit seeks to find a way to once again unlock the stranglehold on prices that’s kept them at $50 or below. One key factor for that drop that industry experts cite is the massive production of shale gas that’s been taking place in the United States and the continued oil production in the tar sands of Alberta, Canada.