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Saudi Arabia could save some $200 billion over the next ten years by switching from crude oil to natural gas and renewables for electricity production, Reuters reports, citing the Kingdom’s Finance Minister.
“Instead of buying fuel from the international markets at $60 and then selling it at $6 for Saudi utilities, or using some of our quota in OPEC to sell at $6, we’re going to actually displace at least 1 million barrels a day of oil equivalent in the next 10 years and replace it with gas and renewables,” Mohammed al-Jadaan said.
OPEC’s largest oil producer and world’s largest exporter of crude is on a desperate quest to reduce its dependence on oil revenues by diversifying its economy away from the flagship export stock. Earlier this year, Crown Prince Mohammed, who appears to be the de facto ruler of Saudi Arabia, announced yet another investment program with a view to this diversification that he said would “unlock new local investments valued at SAR 5 Trillion through the end of 2030.”
This amount is equal to roughly $1.3 trillion, and its unlocking will be enabled by investments from Saudi Arabia’s largest private companies, the Kingdom’s Public Investment Fund, and a National Investment Strategy, for which the details have yet to be released. The total investment poured into Saudi Arabia’s private sector will amount to some $3.20 trillion (12 trillion riyals).
The Vision 2030 diversification plan that Mohammed launched a few years ago is also very much alive, according to Al-Jadaan. The minister said the Kingdom will be prioritizing fiscal discipline until all the targets of the Vision 2030 plan were achieved.
“Between now and 2025, and possibly until 2030, fiscal sustainability is a priority for us. We believe that until we achieve all the targets that Vision 2030 has set, we need to maintain fiscal sustainability and control government expenditure,” Al-Jadaan said.
