Saudi Delegation Culminates U.S. Tour with Return to Oil Roots
April 07 2018 - 8:39PM
Dow Jones News
By Erin Ailworth
HOUSTON -- After courting Hollywood and Silicon Valley, a Saudi
delegation led by Crown Prince Mohammed bin Salman capped a nearly
three-week American tour on Saturday by touting potential
petrochemical investments totaling billions of dollars along the
U.S. Gulf Coast.
The plans for investment by Saudi Arabian Oil Co., known as
Aramco, and Saudi Basic Industries Corp., known as Sabic, weren't
final, and not wholly unexpected. But they underscored that the
kingdom is looking to capitalize on the bounty of fossil fuels
being unlocked by shale drilling to cheaply make plastics and other
byproducts in the U.S.
A wave of companies including DowDuPont Inc., Exxon Mobil Corp.
and Royal Dutch Shell PLC are investing in plants along the U.S.
Gulf Coast in what has become a massive petrochemical boom.
On Saturday, Aramco's Motiva Enterprises LLC announced
memorandums of understanding with Honeywell International Inc. and
TechnipFMC PLC to explore potential petrochemical facilities that,
if built, would represent multibillion-dollar investments.
Sabic meanwhile said it was close to making a final investment
decision on whether to build a large petrochemical facility with
Exxon near Corpus Christi.
"We appreciate the generations of American men and women who
helped to build Aramco over many decades and made a lasting
contribution," said Saudi Energy Minister Khalid Al-Falih, as the
crown prince sat nearby.
The Saudi announcements on Saturday were a return to basics for
the country's leaders following a whirlwind tour of America during
which they met with an array of corporate titans and political
leaders as they sought to diversify the kingdom's business
interests and present it as more than an oil power.
As part of his economic modernization plan, Prince Mohammed is
also trying to change the view of Saudi Arabia as a strict Islamic
kingdom to one that is more tolerant, socially liberal and
respectful of women.
The prince has met top business executives including Amazon.com
Inc.'s Jeff Bezos, Microsoft Corp.'s Satya Nadella and Walt Disney
Co.'s Robert Iger, as he seeks to reshape a Saudi-U.S. business
relationship long based on oil sales and military contracts.
He has lobbied American tech and entertainment leaders to bring
everything from data centers to cinemas to Saudi Arabia, part of
his push to transform the country into a more open society, one
less dependent on oil.
But the Texas finale over the weekend demonstrated that the
country's core relationship with the U.S. for now is still founded
on fossil fuels. Among those in attendance at the Houston-area
events was President Donald Trump's energy secretary, Rick
Perry.
At an event Saturday in Katy, Texas, outside of Houston, Sabic
announced it is assessing plans for an Americas region head office
in the greater Houston area.
Sabic Chief Executive Yousef Al-Benyan also said his company
hopes to make a final investment decision on whether to build the
petrochemical plant with Exxon by the end of June.
"The revolution of shale gas has really changed our view," he
said in an interview. "We recognize North America as really a hub
for our growth strategy."
Aramco said Motiva would likely make a final decision on whether
to proceed with its new U.S. petrochemical investments next
year.
(END) Dow Jones Newswires
April 07, 2018 21:24 ET (01:24 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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