DUBAI: Since the foundation of the Kingdom of Saudi Arabia, US industrial corporations have been the most committed partners in its economic development, notably in the exploration and production of oil, but also right across the heavy industry sector.
As the Kingdom moves to the next phase with the Vision 2030 strategy to reduce oil dependence, US corporations are again playing a leading role. The razzamatazz of the first foreign visit by President Donald Trump to Riyadh in May was further proof that the US-Saudi “special relationship” is blooming, especially in business matters.
GE, the American industrial giant once known as General Electric, has been involved in that relationship for a long time. Power was, and still is, a major requirement for Saudi Arabia, and power generation has been at the heart of the GE proposition since Thomas Edison, one of the company’s founders, switched on the first commercially viable light bulb 140 years ago. It has been estimated GE turbines produce a third of the world’s electricity.
Russell Stokes, the chief executive of GE’s power division since last summer, is relatively new to the Middle East, but is a GE veteran of 20 years, and he gets the wider historical picture.
“GE has supported regional development for over 80 years in more than 20 countries, working to support growth and build the energy, transportation and health care sectors. We have more than 3,000 customers and 14,000 employees in the region. GE equipment was used in the very first oil explorations in Saudi Arabia in the 1930s,” he said.
It is still very much involved in the Kingdom’s oil sector via its oil-services business, Baker Hughes, one of Saudi Aramco’s main partners.
The GE power portfolio contains all the traditional aspects of the business, like turbines and engines for power generation and distribution from oil, gas and steam, as well a water technology essential in a desert region. But it also increasingly includes nuclear and alternative power sources, like wind, wave and solar.
So GE is more than just an industrial company; it is also at the cutting edge of industrial innovation. In Saudi Arabia, for example, it operates the GE Manufacturing Technology Center in Dammam, with a specialized research and development business complementing manufacturing and maintenance facilities.
The center has a 70 percent Saudi workforce, and has collaborated with over 300 small- to medium-sized enterprises. “We help to strengthen the Kingdom’s industrial ecosystem,” said Stokes.
That ecosystem is undergoing a profound change. The Vision 2030 strategy involves reducing dependence on oil and promoting private-sector entrepreneurialism as opposed to public-sector bureaucracy.
But it also involves embracing the “fourth industrial revolution” — the transformation of economic systems put in train by the intersection of digital, communications and robotic technology. Projects like the $500 billion Neom mega-city, which will have more robots than people, as well as other high-tech developments, are a central part of the strategy.
These days, GE calls itself a “digital industrial company,” and Stokes explained what this means for the power business in the Middle East.
“The industrial Internet is helping companies reach new levels of productivity and gain competitive advantages. GE is the world’s leading digital industrial company, marrying software and hardware to deliver outcomes for customers that were previously unattainable, such as gains in efficiency for power plants or less downtime for jet engines.
“Being a digital industrial company is both internal and external for GE — internal to provide our employees with the latest tools and empower them to be high performers, and external so our customers can benefit from the digital technology solutions we offer,” he said.
How does this principle apply to Saudi Arabia, with its unique demographic challenges and power requirements?
“Energy consumption in the Kingdom is high on a per capita basis, with power generation investments being made to meet demand for the industrialized economy. As the Saudi Vision 2030 is implemented there is likely to be long-term growth in demand for energy. As per the aims of Vision 2030, that demand is going to be met with a more diversified energy mix, including ambitious targets for renewables and a continued focus on more efficiency.
“With approximately 50 percent of Saudi Arabia’s population under the age of 30, the younger generations will likely be at the forefront of supporting new forms of energy and changing behaviors, and we should embrace them,” he said.
So Saudi Arabia’s next generation has a new and different requirement for basic everyday power and water needs, and GE will be involved in finding solutions to those changing demands. But on top of that, the Kingdom will also need some innovative thinking for the mega-projects that are the flagships of the transformation strategy — Neom, the Red Sea Resort and the other big economic and leisure hubs planned in the Kingdom. Stokes is looking forward enthusiastically to getting involved in these.
“These mega-projects are truly path-breaking, and have the potential to make an enormous positive impact on the economy of the Kingdom. For example, Neom is creating a world-class hub that will help enable key economic sectors, including renewable energy and water, biotech, and advanced manufacturing. As the world’s leading digital industrial company, GE is very excited about these projects,” he said.
Some skeptics have questioned the practicality of achieving the transformation planned in the Kingdom, both in terms of changing the conservative social and business culture of Saudi citizens, and the challenges of undertaking such a profound transformation in a comparatively short time frame. Does Stokes think Vision 2030 is achievable?
“It is bold and comprehensive, and being led by strong and committed leadership. Yes, I believe it is achievable. The vision is holistic, with a drive for transparency and clearly articulated measurements related to execution. The role of the private sector, as well as companies like GE, is important to build local capabilities and capacity, not just for Saudi Arabia but also for exports. The key to Vision 2030 now will be for all of us to continue working collaboratively for the benefit of the country,” he said.
The other aspects of the Saudi transformation that might attract GE is the corporate opportunity it presents. The government is planning a $200 billion privatization program involving the sell off of parts of the economy currently owned by the government, with power and water key parts of that.
GE’s expertise and long-standing relationship with the Kingdom would seem to put it in a good position to buy or at least joint venture on some of the privatization assets, but Stokes declined to talk details. “We are constantly open to new prospects for growth and evaluating potential partnerships and collaborations. We will assess each opportunity as it comes our way,” he said.
Outside the Kingdom, the wider Middle East, North Africa and Turkey (MENAT) is a key region within the global GE set-up, contributing $17.8 billion of the $112 billion of worldwide industrial revenue the company reported in 2016. There are big plants in Kuwait and the UAE, and also in Qatar, which Stokes declined to discuss.
“The Middle East remains a critically important region for GE’s global growth, and we have a strong customer and employee base here. For the energy industry, we continue to see demand for gas, renewables and steam power projects in the region, and we have expanded our services capabilities to ensure long-term support is available as well. As the energy mix continues to evolve, we will be able to offer technologies which best fit the needs of the region, our customers and the visions of forward-thinking plans like the Saudi Vision 2030,” he said.
At home in the US, GE has been through a challenging time, with a change of chief executive coinciding with a falling share price as doubts emerged among investors about some aspects of the conglomerate’s long-term strategy.
Last month, new CEO John Flannery announced a strategy review after a $6.2 billion charge emerged relating to the financial services business, which is being investigated by the US authorities.
How these financial issues will play out remains to be seen, but it seems unlikely they would impact GE’s core power business, which is the mainstay of its operations in the region.
At the Riyadh conference in May, GE announced $15 billion of deals with the Kingdom, mostly in the power-generation business, but also with Saudi Aramco, the national oil giant, and in the medical technology and training sector. That is a sign of ongoing commitment to the Kingdom after GE’s decades of involvement there.
“The world is transforming rapidly, and the digital industrial transformation is happening in all industries, but the transformation of energy is really what is becoming a global phenomenon. The convergence of hardware, software, controls and the cloud is a personal passion of mine,” said Stokes.
“With the astounding growth in the MENAT region over the last few years, we will continue to seek out local collaborators to make the future a reality.”
GE helping generate the energy behind Saudi Vision 2030
GE helping generate the energy behind Saudi Vision 2030
- 80 years on, GE very much involved in Kingdom's energy sector
- With KSA's strong and committed leadership, Vision 2030 is achievable — GE exec
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EU seeks to boost green energy collaboration with Saudi Arabia as Kingdom leads regional transition
RIYADH: The EU is keen to expand its cooperation with Saudi Arabia in the energy sector as the world increasingly shifts toward green energy, according to a senior EU official.
In an interview with Arab News on the sidelines of the World Investment Conference, Christophe Farnaud, the EU ambassador to Saudi Arabia, emphasized that the EU possesses significant expertise in the green energy sector, which could help accelerate Saudi Arabia’s clean energy transition, as well as support the broader Gulf Cooperation Council region.
Saudi Arabia, with its ambitious initiatives such as the world’s largest green hydrogen plant in NEOM, is leading the energy transition in the region, aiming for net-zero emissions by 2060.
“One of the many sectors where we are investing and what the partnerships are developing is the energy sector. It comes against the backdrop, not just of the regional needs, but also with this view of facing the green transition that we committed worldwide, not just as the Europeans, but also the Saudi government. This is where can make a difference,” said Farnaud.
He added: “The EU has a strong expertise in that field (green energy). And the energy sector has been in many ways a key factor in the development of the Kingdom. So we already have relationships, between EU companies and Saudi Arabia. But now we will have a stronger focus on energy transition.”
Farnaud noted that European firms have significant opportunities to collaborate in Saudi Arabia’s expanding renewable energy sector, particularly with the Kingdom’s substantial investments in solar power and green hydrogen projects. He also mentioned that European energy companies could work with Saudi energy giants like ACWA Power to help speed up the green energy transition.
In addition to energy, Farnaud pointed out that there are numerous other areas where Saudi Arabia and the EU could strengthen cooperation, including transport, machinery for emerging industries, entertainment, and tourism.
“Machinery is currently already a key sector for the exchanges between the EU and the Kingdom. But I also wanted to insist on the fact that even the new sectors for the Kingdom, like entertainment, tourism, which are a major asset for the coming years, and the EU has a well-known competence and expertise in these industries,” he said.
The EU ambassador also noted that European companies are increasingly aware of the transformation taking place in Saudi Arabia and are eager to explore new opportunities in the Kingdom.
“We had the first ever EU-Saudi investment forum last year in October. We had around 1,400 companies registered and it shows the strong interest from them. It shows also the commitment by the Saudi government and EU to promote these exchanges,” said Farnaud.
He added that the EU is also helping small and medium-sized enterprises in Europe understand the potential of the Saudi market, and highlighted how the Kingdom’s updated investment law could benefit firms entering the country.
Saudi Arabia’s revised investment law, introduced in August, promises enhanced protections for international investors, including adherence to the rule of law, fair treatment, property rights, and stronger safeguards for intellectual property, while facilitating smooth fund transfers.
Wider EU-GCC cooperation
Farnaud also discussed broader EU-GCC relations, noting that the EU-GCC Summit held in October underscored the importance of “partnership in the economic field,” with energy cooperation identified as a key area for strengthening ties.
“The EU and GCC have very dynamic economic relations. And it is not just about Saudi Arabia and the EU, where already the investment stocks from EU in the Kingdom is above €31 billion ($32.58 billion) which is quite significant. But if you enlarge the picture to the GCC as a whole, we are above €215 billion,” he told Arab News.
During a panel discussion on the second day of the World Investment Conference, Farnaud highlighted that European companies are playing an active role in most of Saudi Arabia’s major “giga-projects,” including NEOM, Qiddiya, and AlUla.
He also emphasized that Europe offers an open market with a highly skilled workforce, which countries in the GCC, including Saudi Arabia, can tap into to accelerate their economic diversification efforts.
Regarding foreign investments, Farnaud said: “Investment is a two-way thing, and it is a question of trust and mutual knowledge. It is not just us going to the GCC, which is important, it is also GCC countries coming to Europe. In that way, they are already doing it. About 50 percent of foreign investments of GCC countries go to Europe.”
Progress on Vision 2030
During the same panel, Prince Sultan bin Khalid Al-Saud, CEO of the Saudi Industrial Development Fund, highlighted Saudi Arabia’s socio-economic progress since the launch of Vision 2030. He described the Kingdom as unique, thanks to its “positive energy and optimism.”
The SIDF CEO stressed that Vision 2030 is designed to benefit both current and future generations of Saudis, with a particular focus on investing in people.
“For Saudi Arabia, development starts with investing in people. No matter how you look at Vision 2030, or how you slice it, it’s all about the people—it’s about investing in them, trusting their abilities, and empowering them to create something not just for this generation of Saudis, but for all future generations,” he said.
Affirming the growth of the startup ecosystem in Saudi Arabia, the SIDF chief said that venture capital in Saudi Arabia has grown at a compound annual growth rate of 86 percent in the last five years.
He also added that Saudi Arabia’s women participation in the workforce is higher than that of Western Europe.
According to the latest report by the General Authority for Statistics, unemployment among Saudi nationals fell to 7.1 percent by the end of the second quarter, a quarterly drop of 0.5 percentage points and an annual decline of 1.4 percentage points.
The report added that the unemployment rate among Saudi females also witnessed a sharp quarterly decline of 1.4 percentage points at the end of the second quarter reaching 12.8 percent.
Saudi Arabia grants operator license for 1st international marina to Jeddah yacht club
JEDDAH: Saudi Arabia has granted an operator license for its first international harbour to Jeddah Yacht Club and Marina, boosting tourism and strengthening its position as a leading regional and global maritime hub.
On Nov. 26, the Saudi Red Sea Authority announced that it had submitted the license to the organization, which is owned by Sela, a company under the Public Investment Fund.
Mohammed Bukhari, vice president of the coastal tourism operations at SRSA, presented the license to Amer Daggag, head of destinations at Sela, at the headquarters of the Jeddah-based club.
In line with the Kingdom’s Vision 2030, the authority began working in 2021 to develop and regulate the coastal tourism sector.
Its efforts include issuing licenses and permits, creating policies and strategies, and assessing infrastructure needs, as well as preserving the marine environment, attracting investments, and promoting navigational and marine tourism activities.
In a statement, SRSA said the move is part of its efforts to develop a thriving coastal tourism sector by issuing licenses and permits and establishing guidelines, rules, and standards for marinas’ development, management, and operation.
The release added that the initiative aims to encourage participation in these activities, attract and support investors, and promote coastal tourism projects along the Red Sea.
In May, SRSA granted licenses for three tourist marinas: the Al-Ahlam Marina in Jeddah, the Al-Ahlam Marina in Jazan, and the Red Sea Marina in Jeddah.
The authority emphasized that regulating marina operations would enhance the quality of services for tourists and visitors while protecting and sustaining the marine environment, emphasizing that these operators must adhere to international standards to obtain their licenses.
SRSA also issued its first maritime tourism agent license to Cruise Saudi, a company owned by PIF, as part of its broader role in enabling tourism.
The licensed agent was stated to provide services to yachts and cruise ships, ensuring the sustainable development of marine tourism and facilitating vessel movements within the Kingdom’s waters in accordance with the highest environmental standards and practices.
Last year, the Saudi Sailing Federation and Sela signed a memorandum of understanding at JYC to enhance cooperation between the two parties. Under the agreement, Sela committed to providing consultancy services and logistical support for SSF events and activities held at the Jeddah Yacht Club and Marina.
Sela also agreed to collaborate with SSF to establish a strategic partnership to manage races and events at JYC. The agreement allows SSF to benefit from the JYC training academy, offering educational programs for those seeking to develop their sailing skills.
In December 2023, JYC hosted the first America’s Cup race on the Red Sea, which was attended by Prince Abdulaziz bin Turki Al-Faisal, minister of sport, along with dignitaries from across the Kingdom, the world’s top professional sailors, and global enthusiasts.
Saudi Arabia pledges $932m boost to 17 tourism projects in Al-Ahsa
RIYADH: Saudi Arabia has committed over SR3.5 billion ($932 million) to develop 17 tourism projects in Al-Ahsa, positioning the region as a key destination in the Kingdom’s growing travel sector, according to a senior official.
During a meeting with investors and entrepreneurs as part of his broader tour across Saudi regions, Tourism Minister Ahmed Al-Khateeb outlined plans to enhance the governorate’s tourism infrastructure.
The projects will add more than 1,800 hotel rooms, leveraging Al-Ahsa’s natural and cultural assets to attract domestic and international visitors, the Saudi Press Agency reported.
The initiative aligns with the Kingdom’s National Tourism Strategy, which aims to attract 150 million visitors annually by 2030 and increase the tourism sector’s contribution to Saudi Arabia’s gross domestic product from 6 percent to 10 percent.
Al-Khateeb highlighted investment opportunities in the sector, reaffirming the ministry’s commitment to providing comprehensive services and facilities to encourage further private sector involvement.
As part of the tour, the minister visited the SR200 million Radisson Blu Hotel in Al-Ahsa. Spanning over 10,000 sq. meters and featuring more than 180 rooms, the hotel — supported by the Tourism Development Fund — combines international luxury with local authenticity, serving as a model for future developments in the region.
Other regions across the Kingdom are also experiencing significant growth in the tourism sector.
Earlier this month, the Ministry of Tourism announced that Saudi Arabia’s Hail region welcomed over 1.1 million tourists in the first half of 2024, including 170,000 international visitors, reflecting the Kingdom’s growing appeal as a travel hub.
The ministry also reported that over 907,000 visitors were domestic travelers, showcasing the region’s popularity among residents. Licensed hospitality facilities in Hail now offer around 2,600 rooms, meeting increasing demand.
The surge aligns with Saudi Arabia’s Vision 2030, which focuses on enhancing tourism infrastructure and attracting global travelers.
The Kingdom plans to develop Hail as the fifth destination under the Saudi Tourism Investment Co., known as ASFAR, a Public Investment Fund-owned entity.
According to the latest UN Tourism report, Saudi Arabia climbed 15 places to rank 12th globally in tourist spending for 2023 — the largest jump among the top 50 countries.
This follows a September report from the UN Tourism, which highlighted the Kingdom’s leadership among G20 nations with a 73 percent increase in international visitor growth and a 207 percent rise in international tourism receipts from January to July, compared to the same period in 2019.
Jordan forecasts $14.3bn in public revenues in 2025 budget
RIYADH: Jordan’s public revenues for 2025 are projected at 10.2 billion dinars ($14.3 billion), slightly down from the 10.3 billion dinars forecast for 2024, according to the nation’s General Budget Department.
The 2025 draft budget estimated 9.5 billion dinars in local revenues and 734.3 million dinars from foreign grants, closely aligning with the figures for 2024.
The draft budget provided a detailed financial framework for the country, highlighting major national development projects, governorate-specific allocations, and a roadmap for spending during 2025–2027.
The document underscored the government’s commitment to balancing fiscal discipline with strategic investments aligned with Jordan’s Economic Modernization Vision.
The vision is centered on the slogan “A Better Future” and focuses on two main pillars: driving accelerated economic growth and enhancing the quality of life for all citizens.
Sustainability is also a key foundation of this vision.
Economic and fiscal overview
Total public expenditures for 2025 are estimated at 12.5 billion dinars, consisting of:
- 11.04 billion dinars in current expenditures allocated for operational and administrative functions, including salaries, pensions, and subsidies.
- 1.47 billion dinars in capital expenditures, reflecting a 16.5 percent increase compared to 2024. This allocation prioritizes infrastructure development, health care enhancements, and educational improvements.
The budget targets a reduction in the primary deficit to 2 percent of gross domestic product, compared to 2.9 percent in 2024.
Key national investments
The draft budget emphasized transformative projects to address critical national needs, including the National Water Carrier Initiative, which addresses Jordan’s chronic water scarcity and ensures long-term water security.
There is also a focus on a railway project that connects Aqaba Port to Al-Shidiya and Ghor Al-Safi. This initiative aims to boost logistical efficiency and economic integration.
Other key projects include investments in renewable energy and infrastructure upgrades and enhancements in public transportation networks to ease connectivity and reduce environmental impact.
Economic growth targets
The budget framework projects there will be 2.5 percent real GDP growth, driven by ongoing structural reforms.
It also forecases 4.9 percent nominal growth, supported by moderate inflation rates that contribute to financial and monetary stability.
Governorate budgets and modernization efforts
The budget allocates significant funds to governorates to ensure equitable development and address local priorities. Notable regional allocations include money for the construction and maintenance of hospitals, schools, and transportation infrastructure.
There is also funding for agricultural development, water management, and job creation initiatives tailored to local needs.
Specific projects detailed in the governorate budgets include road maintenance and expansions in Irbid, Al-Mafraq, and other regions, investments in health care facilities, including expansions of hospitals and primary care centers, and the development of educational institutions, such as building new schools and upgrading existing facilities.
In line with the “Public Sector Modernization The Roadmap,” the draft budget included funding for implementing updated job guidelines, creating new vacancies, and modernizing public administration to enhance service delivery.
This framework is a comprehensive roadmap to improve public administration and enhance the institutional approach to responding efficiently to domestic and global developments.
Oil Updates – crude steadies amid possible Middle East ceasefire
- Israel, Lebanon eye ceasefire in Israel-Hezbollah conflict
- MidEast ceasefire cuts likelihood of US sanctions on Iran oil
- Kyiv faces sustained Russian drone attacks
SINGAPORE: Oil prices edged higher in early trade on Tuesday after falling in the previous session as investors took stock of a potential ceasefire between Israel and Hezbollah, weighing on oil’s risk premium.
Brent crude futures rose 15 cents, or 0.21 percent, to $73.16 a barrel as at 10:05 a.m. Saudi time, while US West Texas Intermediate crude futures were at $69.09 a barrel, up 15 cents, or 0.22 percent.
Both benchmarks settled down $2 a barrel on Monday following reports that Lebanon and Israel had agreed to the terms of a deal to end the Israel-Hezbollah conflict, which triggered a crude oil selloff.
Market reaction to the ceasefire news was “over the top,” said senior market analyst Priyanka Sachdeva at Phillip Nova.
While the news calmed fear of disruption to Middle Eastern supply, the Israel-Hamas conflict “never actually disrupted supplies significantly to induce war premiums” this year, Sachdeva said.
“The vulnerability of oil prices to geopolitical headlines lacks foundational backup and, coupled with the inability to maintain recent gains, reflects weakening global demand for oil and suggests a volatile market ahead.”
Iran, which supports Hezbollah, is an OPEC member with production of around 3.2 million barrels per day, or 3 percent of global output.
A ceasefire in Lebanon would reduce the likelihood that the incoming US administration will impose stringent sanctions on Iranian crude oil, said ANZ analysts.
If President-elect Donald Trump’s administration returned to a maximum-pressure campaign on Tehran, Iranian exports could shrink by 1 million bpd, analysts have said, tightening global crude flows.
In Europe, Ukraine’s capital Kyiv was under a sustained Russian drone attack on Tuesday, Mayor Vitali Klitschko said.
Hostilities between major oil producer Russia and Ukraine intensified this month after US President Joe Biden allowed Ukraine to use US-made weapons to strike deep into Russia in a significant reversal of Washington’s policy in the Ukraine-Russia conflict.
Elsewhere, OPEC+ may consider leaving its current oil output cuts in place from Jan. 1 at its next meeting on Sunday, Azerbaijan’s Energy Minister Parviz Shahbazov told Reuters, as the producer group had already postponed hikes amid demand worries.
On Monday, Trump said he would sign an executive order imposing a 25 percent tariff on all products coming into the US from Mexico and Canada. It was unclear whether this would include crude oil.
The vast majority of Canada’s 4 million bpd of crude exports go to the US Analysts have said it is unlikely Trump would impose tariffs on Canadian oil, which cannot be easily replaced since it differs from grades that the US produces.
“Contrary to today’s sell-off in risk assets, I think the tariff announcements are actually risk-positive because they are lower than consensus expectations,” said market analyst Tony Sycamore at IG.
Trump’s proposed additional 10 percent tariffs on Chinese imports are “well below” the 60 percent level he threatened pre-election, Sycamore said.
For the time being, markets are eyeing Trump’s plan to increase US oil production, which has been near record levels throughout 2022 to 2024 and absorbed supply disruption from geopolitical crises and sanctions, Phillip Nova’s Sachdeva said.
