Saudi Aramco’s expansion strategy providing fuel for Vision 2030

Saudi Aramco’s expansion strategy providing fuel for Vision 2030
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Updated 04 August 2024
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Saudi Aramco’s expansion strategy providing fuel for Vision 2030

Saudi Aramco’s expansion strategy providing fuel for Vision 2030
  • Energy giant is mirroring the Kingdom’s diversification goals while pursuing a greener future

RIYADH: Saudi oil giant Aramco’s robust integrated expansion strategy is helping to drive forward the Kingdom’s Vision 2030 economic diversification plan while it balances sustainability concerns, experts have told Arab News.

Situated at the heart of Saudi Arabia’s energy sector transformation, the state-owned firm has been focused on creating new market opportunities and increasing integration across various areas.
Economists have told Arab News that Aramco is not just focused on adding to Saudi Arabia’s bottom line, but is also developing technological innovation to help deliver on ambitious environmental goals.
These include a special $1.5 billion fund created to invest in technology that can help lower fossil fuel use — underlining the company’s commitment to reducing its carbon footprint and driving energy efficiency.
Saudi-based economist Talat Hafiz told Arab News: “Among the several features that Aramco is careful to achieve aside from growth is reaching a level of sustainable business that supports the company’s growth in a very complex business environment, especially when considering the changes happening in the world energy mix and the introduction of new energy alternatives such as renewable and nuclear energies.”




Talat Hafiz

Hafiz emphasized the importance of the firm’s diversification strategy, saying that the firm can “easily mitigate the risks associated with any investments locally or abroad” especially when considering the successful investments that Aramco has made locally & internationally.
“Aramco’s expansion business strategy is deeply designed and thought out to add value through opening new market opportunities and creating a chance for more integration, especially when considering that Aramco is a diversified energy company and not only an oil and gas producing entity, ” he added.
A pivotal aspect of the company’s global strategy is its venture capital arm, Aramco Ventures, which recently received a $4 billion injection to propel the development of disruptive technologies.
This initiative underscored Aramco’s dedication to diversifying its portfolio and supporting startups worldwide, aligning with its long-term objectives in new energies, chemicals, and digital technologies.
Discussing Aramco’s technological investments and sustainability efforts, Hafiz noted: “Aramco is a major player locally and internationally in ensuring that its business is sustainable not only financially but also to support the Kingdom’s efforts to reach net-zero emissions goals by 2060. Aramco is committed to becoming carbon neutral by 2050 and has since been unveiling numerous initiatives and projects.”
Looking forward, Aramco’s strategic roadmap includes further expansion into new markets, particularly in Asia and North America, and leveraging its venture capital arm to incubate disruptive technologies.
CEO Amin Nasser has long affirmed that the company is “looking at the current market status which, even though challenging, presents an excellent opportunity for growth.” This forward-thinking approach underscored the strategic vision to secure the position as a leader in the global energy landscape.
Formed in the 1930s and becoming state-owned in the 1980s, Aramco saw its global footprint expand rapidly during the 1990s.
This included downstream joint ventures established in the US and South Korea which marked the company’s strategic diversification beyond upstream operations, positioning it as a key player in global energy markets.
Moving into the 21st century, key milestones included the launch of Petro Rabigh in 2009, Aramco’s first petrochemical plant, followed by the formation of Sadara Chemical Co. in 2011 and the commissioning of SATORP and YASREF refineries in 2014.
The firm’s global outreach extended to Europe, Asia, and the Americas, fostering collaborations with international partners and universities on sustainable energy solutions.
By 2018, Aramco had achieved significant milestones in unconventional resource production and announced its ambitious acquisition of a majority stake in SABIC, transforming it into a major global petrochemicals producer.
Deals completed in recent months include acquiring a 50 percent stake in the Jubail-based Blue Hydrogen Industrial Gases Co., a 10 percent stake in a thermal engines joint venture between French carmaker Renault and Chinese automaker Geely, and a 40 percent equity stake in Gas & Oil Pakistan.
Away from energy, Aramco has also been keen to boost other blossoming sectors in Saudi Arabia.
A 47,000-capacity arena, to be called the Aramco Stadium, is to be built in Alkhobar in the Eastern Province following a cooperation agreement between real estate developers ROSHN Group and the company.
As well as sponsoring the Esports World Cup held in Riyadh in July, Aramco also provided a high-end simulator zone which offered a hyper-realistic experience akin to driving a Formula 1 car.
The company’s diversification efforts echo those of Saudi Arabia in general, and economist and policy adviser Mahmoud Khairy said Aramco and the Kingdom are able to pursue these endeavors as the business generates “substantial revenue” for the country.




Mahmoud Khairy

“This income allows the government to invest in various sectors, promoting a more balanced economic structure,” he said, adding: “Aramco’s investments in non-oil sectors, including petrochemicals, refining, and renewable energy, are designed to create a more diversified economic structure and reduce the Kingdom’s reliance on crude oil exports.”
As well as financial rewards, the company is benefiting from working with some of the best and brightest in the world.
“Aramco’s strategic partnerships and acquisitions abroad have not only expanded its global footprint but also brought in foreign expertise and technology to Saudi Arabia. These global engagements help transfer knowledge and best practices to the Kingdom, aiding in its economic modernization,” Khairy added.
Aramco’s downstream expansion has brought significant economic benefits both locally and globally. In Saudi Arabia, it has spurred job creation across sectors like manufacturing and logistics, reducing unemployment and fostering a skilled workforce, according to Khairy.
“Globally, Aramco ensures stable supplies of refined products and petrochemicals, supporting industries worldwide. Its efficient operations enable competitive pricing, benefiting global consumers and enhancing economic efficiency,” he added.
Regarding the economic and policy incentives to encourage Aramco’s investment in new energy technologies, Khairy suggested: “Providing tax credits or exemptions tailored to investments in renewable energy and clean technologies, subsidies, grants, and low-interest loans specifically designed for renewable energy projects can mitigate initial investment costs and promote quicker adoption of new technologies.”
Regulatory support, including feed-in tariffs, clear and stable regulatory frameworks, and streamlined permitting processes, are essential to reduce risks and uncertainties, according to the expert.
Hafiz emphasized the importance of Aramco’s commitment to sustainability: “Aramco is a major player locally and internationally in ensuring that its business is sustainable not only financially but also to support the Kingdom’s efforts to reach net-zero emissions goals by 2060.”
He noted that Aramco is committed to becoming carbon neutral by 2050 and has since been unveiling numerous initiatives and projects.
“Aramco is committed to investing in blue and green hydrogen and carbon capturing,” said Hafiz.


United Bank for Africa plans to operate in Saudi Arabia, chairman says

United Bank for Africa plans to operate in Saudi Arabia, chairman says
Updated 28 October 2024
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United Bank for Africa plans to operate in Saudi Arabia, chairman says

United Bank for Africa plans to operate in Saudi Arabia, chairman says

RIYADH: United Bank for Africa Group is set to open its first presence in Saudi Arabia early next year, pending regulatory approval from the Kingdom, according to its chairman

Speaking to Arab News at the FII New Africa Summit in Riyadh, Tony Elumelu highlighted that they are exploring business opportunities within the Kingdom.

UBA operates 24 branches across multiple continents and countries, including the US, Europe, and Dubai, but establishing a presence in Saudi Arabia will further consolidate economic ties between the Kingdom and Africa.

“We are trying to open a bank in Saudi Arabia. We have applied to the Central Bank of Saudi Arabia, and we hope that will be successful soon. So that we can be the only first African bank with a presence in Saudi Arabia,” Elumelu said. 

He continued: “You might ask me: ‘Why am I interested in having United Bank for Africa operate in Saudi Arabia?’ Because of the trade opportunities, because of investment opportunities, because we like what is happening in Saudi Arabia.”

The chairman underlined that this is an opportune time for the private sector to foster more robust trade and stronger investment ties between the Kingdom and Africa.

The frequent visits and business delegations between Saudi Arabia and the continent demonstrates a strong commitment to strengthening these connections.

Elumelu highlighted the growing interest from the Kingdom and its Public Investment Fund in investing in Africa, and he believes they see the continent’s infrastructure development as a promising opportunity.

He reflected on how the Kingdom’s authorities are working to connect Saudi investors eager to capitalize on the continent’s potential and facilitate the necessary financing for development with African projects.

“I listened to your finance minister who said there’s times they will feel that they are Africans. It was so exciting to hear him say that,” Elumelu said.

He added: “Let’s put resources together and bring to fruition those projects that we see on the African continent that have high returns, high return potential, as well as catalytic impact in helping to develop Africa.”

Elumelu went on to say: “Today’s world, people are not interested in profit taking. People want to make a profit at the same time; if making that profit can help to improve lives, they are happy to do so.”

The chairman concluded the interview by expressing his wish for a stronger economic relationship with Saudi Arabia.

“The bilateral relationship is growing. There’s room for significant improvement. But I look beyond today’s levels. I want to see deeper outcomes of that partnership, and that is why I keep talking about investment in infrastructure in Africa,” he said.


Closing Bell: Saudi main index slips to close at 12,053 

Closing Bell: Saudi main index slips to close at 12,053 
Updated 28 October 2024
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Closing Bell: Saudi main index slips to close at 12,053 

Closing Bell: Saudi main index slips to close at 12,053 

RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Monday, losing 15.82 points, or 0.13 percent, to close at 12,053.15. 

The total trading value of the benchmark index was SR5.42 billion ($1.44 billion), as 106 stocks advanced, while 111 retreated.   

The MSCI Tadawul Index decreased by 4.31 points, or 0.28 percent, to close at 1,513.26. 

The Kingdom’s parallel market, Nomu, declined by 114.24 points, or 0.42 percent, to close at 26,802.7. This comes as 31 stocks advanced, while 34 retreated. 

The best-performing stock of the day was Red Sea International Co., with its share price surging by 8.32 percent to SR70.30.  

Other top performers included Zamil Industrial Investment Co., which saw its share price rise by 5.59 percent to SR27.40, and Arabian Contracting Services Co., which saw a 4.33 percent increase to SR178.4. 

Etihad Etisalat Co., also known as Mobily, and Abdulmohsen Alhokair Group for Tourism and Development also saw a positive change at 3.65 percent and 3.6 percent to SR54 and SR2.88, respectively. 

The worst performer of the day was Al-Baha Investment and Development Co., whose share price fell by 7.69 percent to SR0.24. 

Saudi Manpower Solutions Co. and Nama Chemicals Co., also saw declines, with their shares dropping by 3.03 percent and 3.02 percent to SR8.31 and SR25.7, respectively.  

Miahona Co. and MBC Group also saw negative change today at 2.99 percent and 2.84 percent to SR27.55 and SR41.1, respectively. 

On the announcements front, Saudi Ceramic Co. reported its interim financial results for the nine months ending Sept. 30, with a net profit of SR10.78 million, a recovery from a SR120.56 million loss in the same period last year. 

The improvement was attributed to increased sales that bolstered gross profit, along with the absence of a SR165 million provision for fire-related losses recorded last year. The company’s stock closed at SR31.75, up by 0.79 percent. 

Balady Poultry Co. announced a net profit of SR99.98 million for the nine-month period ending Sept. 30, marking a 55.72 percent increase from the previous year. 

According to the statement, the increase was linked to a rise in production from 156,000 to 192,000 birds during this period. The stock closed the session at SR389, reflecting a 0.92 percent decline. 

The National Co. for Glass Industries reported net profits of SR74.8 million for the same period, a 244.7 percent increase year over year. 

The growth is largely due to increased profit contributions from joint ventures in the float glass sector, notably from The Saudi Guardian International Float Glass Co. Ltd., which is now fully operational. The company’s shares ended the session at SR55.2, a rise of 2.79 percent. 


Vision 2030 reshaping women’s lives in Saudi Arabia, says Princess Reema

Vision 2030 reshaping women’s lives in Saudi Arabia, says Princess Reema
Updated 28 October 2024
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Vision 2030 reshaping women’s lives in Saudi Arabia, says Princess Reema

Vision 2030 reshaping women’s lives in Saudi Arabia, says Princess Reema

RIYADH: Saudi Vision 2030 has reshaped women’s lives in the Kingdom, as regulatory reforms help females pursue more opportunities in the public and private sectors, according to Riyadh’s ambassador to the US. 

Speaking at a panel discussion in the inaugural edition of the HERizon Summit, on the sidelines of the eighth Future Investment Initiative, Princess Reema bint Bandar said that the right policies should be implemented to accelerate the progress of females in the business and entrepreneurial landscape. 

Launched under the theme “Invest in Women,” the event aims to bridge the gender gap and empower females to become a formidable force in the global workforce.

A report released by the World Bank earlier this month affirmed Saudi Arabia’s progress in ensuring gender parity and highlighted that the Kingdom successfully raised female labor participation from 22 percent in 2016 to 34 percent by the end of 2023.

“The Kingdom’s progress since Vision 2030 is quite astounding. The biggest change has been made is the regulatory frameworks and the laws that have been implemented, which allowed not just the government to push forward on the inclusion of women, but it also created a framework for the private sector to understand their responsibilities,” said Princess Reema. 

She added: “When we talk about the accelerators for the inclusion of women, more policies and investments have to be made. It is not just the policy on paper; it is all about the implementation, the follow through, and the creation of a space where the woman herself understands what proportion of resources she needs.” 

According to the top diplomat, mentorship, internship, and investment in training and education could help women in the Kingdom explore unique job opportunities in new sectors. 

“Our women do need the exposure to help them level up. The more we engage with women from other countries and men from other countries and learn and expose ourselves, these Saudi women will be women who can work anywhere in the world. That’s the goal,” added Princess Reema. 

She emphasized placing the right woman in the proper role to fully leverage their expertise and achieve the best results.

“I would really employ the due diligence to hire ‘the’ right women, not just ’a woman’. ‘The’ woman that you are looking for does exist. You just need a little time to look for them and find them,” she said. 

She added: “The women in the Kingdom of Saudi Arabia, we are not tokens, we are not a box to tick. We are women who are dedicated to the development, not just about the country, but about families, nations, and our neighborhood.” 

During the event’s opening ceremony, Richard Attias, CEO of FII Institute, said that the first edition of the HERizon Summit is a gathering dedicated to highlighting the limitless potential of women worldwide. 

He added that the event aims to discuss transforming women’s lives and igniting that change.

“We must acknowledge that the past has not been easy for women, where too many voices remained unheard. Today, we are here to break down those barriers. We should envision a world where opportunities are boundless and equal for all. This is a movement toward inclusion, innovation, and unity,” said Attias. 

He added that the summit will work to ensure that women will get equal opportunities like men in all sectors, breaking the barriers of borders and therefore allowing females to reach their highest potential. 

The FII CEO added: “We believe that when women rise, a nation prospers. When women lead, society is transformed, and when women’s voices are amplified, our shared future becomes brighter and stronger. We believe in that.” 

In the panel discussion, Cecilia Attias, founder and president of Cecilia Attias Foundation for Women said that females should be given specific quotas in the board of companies to ensure gender parity. 

“I am surprised we still have a panel for women. We should be part of the other panels. We are in the 21st century. We should have the same opportunities like men,” said Cecilia. 

Jenny Johnson, president and CEO of Franklin Templeton said that women are more talented than men in handling venture capital funds, despite the less support they receive. 

“In the US, less than 2 percent of venture capital have been given to women entrepreneurs, yet they have twice the returns of the average venture capital funds,” said Johnson. 


Saudi Arabia nears cashless society with 98% contactless payment: Visa executive

Saudi Arabia nears cashless society with 98% contactless payment: Visa executive
Updated 28 October 2024
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Saudi Arabia nears cashless society with 98% contactless payment: Visa executive

Saudi Arabia nears cashless society with 98% contactless payment: Visa executive
  • Rapid digital transformation attributed to government support, rising consumer demand, and company’s technological initiatives
  • Visa has opened an innovation center and office in Riyadh’s King Abdullah Financial District

RIYADH: Saudi Arabia has achieved 98 percent adoption of contactless payments for in-person transactions, a leap from just 4 percent in 2017, according to a top Visa executive. 

Speaking to Arab News on the sidelines of a forum ahead of the Future Investment Initiative event, Andrew Torre, Visa’s regional president for Central and Eastern Europe, Middle East, and Africa, attributed this rapid digital transformation to government support, rising consumer demand, and the company’s technological initiatives. 

This aligns with Saudi Arabia’s Vision 2030 to boost digital commerce and create a global hub for innovation, enhancing Visa’s ability to co-create with partners in the Kingdom. 

“If you look at face-to-face transactions in the Kingdom, they were previously with a card and it was chip and PIN; that’s completely changed, and now almost it’s in the high 90s,” Torre said on the sidelines of the FII New Africa Summit in Riyadh. 

He continued: “It was 4 percent of transactions that were contactless in 2017, and now it’s 98 percent, and it’s either tapping with a card, but even more likely, also tapping with your phone, so those payments have become fully digital. One of the fastest we’ve seen in the world.” 

In support of this shift, Visa has opened an innovation center and office in Riyadh’s King Abdullah Financial District, marking 40 years of the company’s presence in Saudi Arabia. 

The facility, Visa’s fourth global center, aims to advance digital payment solutions using technologies like artificial intelligence, biometrics, and the Internet of Things, fostering collaboration with local fintechs, banks, and government entities. 

Sultan Al-Obaida, the chief commercial officer of the KAFD Development and Management Co., highlighted the growth of the Saudi banking sector, which has seen robust growth — 9.3 percent in 2023 and 3.9 percent in the first quarter of this year. 

“Our strong financial presence helps bolster Riyadh’s stature as a premier global financial center, drawing a distinguished array of fintechs, banks and payment players, and we are delighted to welcome Visa to this esteemed portfolio,” he said in a statement. 

The Visa center leverages Saudi Arabia’s role as a leader in digital payment best practices, positioning the Kingdom as a hub for global fintechs to co-create and innovate, according to Torre. 

“I’ll go back to — we’ve been in the Kingdom for 40 years, so we’re no strangers to it. When Vision 2030 came out, a big chunk of that revolved around digitizing financial services and digitizing payments. We’ve been very supportive with the government,” Torre said. 

He added: “Our new innovation center enables us to co-create the future of payments with local partners, driving innovation that aligns with the Kingdom’s Vision 2030 goals.” 

Torre said that Saudi Arabia’s fintech-friendly regulatory environment, led by the Saudi Central Bank, known as SAMA, has been instrumental in fostering digital evolution. SAMA’s early adoption of a sandbox for fintech testing has allowed new players to innovate in embedded finance and cross-border remittances. 

“It has done really, really well — they’ve understood that you need to have innovation, and they’re fostering it through their sandbox approach. They were one of the very early adopters of a sandbox so they can work with fintechs,” Torre added. 

Beyond in-person retail, e-commerce has seen a notable boost, growing at an annual rate of 30 percent. Torre attributed this to the pandemic’s acceleration of online shopping and the convenience it offers consumers. 

The rise in digital payment adoption has also empowered small businesses, giving them access to secure and efficient transactions. “Digital payments provide visibility and ease, supporting small business growth,” said Torre. 

Looking ahead, the Visa executive envisions a future where AI will make payments increasingly seamless, with technology handling transactions automatically based on user preferences. 

“If you look at retail payments, which you said are now 70 percent digital, there’s still 30 percent that’s in cash. We see continued rapid adoption of digital payments, which will start to erode and take cash out of the ecosystem,” Torre said. 

He added: “We think e-commerce continues to grow and accelerate. It is convenient, and we see it becoming more omnichannel as well.” 

Visa’s engagement in Saudi Arabia showcases how collaboration between private companies and regulators can drive significant advances in digital payments, supporting the Kingdom’s goal of a cashless society. 


Saudi ACWA Power’s investment in Africa reaches $7bn, CEO says

Saudi ACWA Power’s investment in Africa reaches $7bn, CEO says
Updated 28 October 2024
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Saudi ACWA Power’s investment in Africa reaches $7bn, CEO says

Saudi ACWA Power’s investment in Africa reaches $7bn, CEO says
  • Marco Arcelli said all the investments revolve around renewables
  • Recent agreements with the Egyptian and Tunisian governments underscore ACWA Power’s commitment to advancing green hydrogen projects and expanding its impact in Africa

RIYADH: Saudi ACWA Power has invested $7 billion in Africa to date, according to the electric power generation company’s CEO.

Speaking during a panel discussion titled “Powering Africa: What is the Future of Energy Investments” during the Future Investment Initiative New Africa Summit in Riyadh, Marco Arcelli said that all those investments revolve around renewables.

This falls in line with the firm’s position as the leading private investor in the continent’s renewable energy sector.

It also aligns with the company’s goal to triple its business size announced in 2023 and expand worldwide, driven by its mission to deliver affordable and reliable energy solutions that foster economic and social development.

“Our experience, ACWA Power is probably the largest energy transition company today, certainly a leading investor in Africa. We have invested more than $7 billion today, 100 percent of that is renewables,” Arcelli said.

“I’m not saying the gas is not part of the transition, in fact, it is because countries like the countries in Africa that are emerging, they need all the energy that they can,” the CEO added.

He went on to say that there is a lot to be done and that the cheapest, fastest, and most secure way to do that is through renewables.

“But certainly, when the economy is growing at the speed that is growing in Africa, you need a complement, so you need the gas and potentially other sources,” Arcelli said.

The world’s largest private water desalination company has also announced that its Redstone Concentrating Solar Power plant in South Africa has reached 50 MW and is set to achieve its full 100 MW capacity in the coming days.

The project will provide clean energy to nearly 200,000 households while significantly reducing carbon emissions. 

Recent agreements with the Egyptian and Tunisian governments underscore ACWA Power’s commitment to advancing green hydrogen projects and expanding its impact in Africa.

Also speaking during the same panel, Kola Karim, group managing director and CEO of Shoreline Group, said looking at the dynamics of Africa, it is evident that it cannot be benchmarked at the same standards as other continents.

“We talk about the industrial revolution in the world, the Western nations have had their first, second, third and Africa has not had its first,” Karim said.

“So, my view is Africa’s blessed with a lot of natural resources, gas is one of them,” he added.

Also present at the panel, Osa Igiehan, CEO of Heirs Energies Limited, said that Africa’s energy future is going to be dominated by gas and renewables.

“Gas is very key. It’s a transmission fluid and we have plenty of it, but renewables is going to be very compelling because it offers us opportunities to address energy gaps in areas that are underserved today,” Igiehan said.

Vera Songwe, chair and founder of Liquidity and Sustainability Facility, was also partaking in the panel, in which she said that there is a question about growth and how fast and how far Africa wants to grow.

“If Africa wants to grow today, our GDP (gross domestic product) is about $3.2 trillion and we need to do a lot more and a lot faster than we need all the technologies we can harness,” Songwe said.

“Africa is already at a tipping point on the transition; 60 percent of Africa’s energy is renewable because of hydro. We have a lot of the economies, they are using hydro,” she added.

Riham Elgizy, CEO of Voluntary Carbon Market, said that 43 percent of Africans do not have access to electricity.

“What century are we in? This is very important for the continent that we finance; be it renewable, be it gas, be it others. All options are on the table,” Elgizy said.

“We need to look at it from a lens of carbon markets and how we can utilize that to scale projects on finance because the major problem in Africa right now is financing. So, this is how to utilize different tools. This is very important to look at and how to be innovative in neutralizing those,” she added.

In September, Saudi Arabia’s FII announced that it would host two summits before its eighth edition, set to take place in Riyadh from Oct 29 to 31. 

Both being held for the first time, one gathering will center on Africa, while the second, titled the “Horizon Summit,” occurring on Oct. 28, will focus on women empowerment and will be chaired by Princess Reema bint Bandar, the Saudi ambassador to the US. 

Under the theme “Infinite Horizons: Investing Today, Shaping Tomorrow,” this edition of the forum will facilitate discussions on how investments can drive a thriving and sustainable future, pushing the boundaries of what is possible for humanity. 

This aligns with FII’s mission to create a purposeful present and a promising future, as well as its vision to bring together the brightest minds and most promising solutions to serve humanity.