S. Arabia to go ahead with development projects falling oil income

[LRE]

RIYADH, Dec 6: Saudi Arabia plans to push ahead with development projects despite falling oil income, hoping to tap opportunities created by falling construction costs, the Saudi central bank governor said in published remarks.

We intend to make sure that these developmental projects go ahead and get adequate financing as it is an opportunity to implement more projects while there is less pressure on resources as the global economy slows down, Hamad al-Sayyari told the London-based weekly Middle East Economic Digest.

Sayyari says that with global construction activity slowing and construction costs moderating, it is a good time for Riyadh to push ahead with development spending, even if it means tapping into the country’s financial reserves, MEED said in its latest issue, published late on Friday.

Italy’s Saipem, SpA, a major contractor for Saudi Arabian oil company Aramco’s $9 billion Manifa oilfield project, said last month the Saudi firm planned an analysis “aimed at cost optimisation” on the project.

It was one of several reports of S. Arabia, the world’s leading oil exporter, aiming to renegotiate contracts it signed at the height of the commodities price boom.

Some government projects will also be financed from the government’s budget, Sayyari said in the interview with MEED.

The Saudi economy has a lot of resilience, Sayyari said. The banking system is strong and stable, with high liquidity and high profit and capital ratios—Reuters