Some of the country's leading CEOs will be heading to Saudi Arabia to hold a first-of-a-kind summit with the Saudi energy minister and other top Saudi officials about the kingdom's plans to diversify its economy away from oil.
The summit will be held alongside President Trump's state visit this weekend, bringing together more than 50 U.S. companies, 40 Saudi companies and nine global companies, the official Saudi news service announced Friday.
The forum also will highlight Kingdom Vision 2030, King Salman's landmark undertaking to transition his country from its most abundant natural resource — crude oil — to other industries by 2030. Those other industries will include everything from heavy manufacturing to electronics, renewable energy and defense. The plan was a necessary wake-up call for the kingdom after a two-year oil supply glut wreaked havoc on the Saudi economy, which depends on crude for its budget. Revenues were more than cut in half as crude oil prices fell from more than $100 per barrel to about $30 per barrel.
The U.S. Energy Information Administration reported Friday that OPEC members earned roughly $433 billion in net oil export revenues in 2016, the lowest level in more than a decade. The energy data agency projects that OPEC revenues are expected to rebound this year. Saudi Arabia has led an agreement between OPEC and non-OPEC nations to reduce production to allow the price to rise and balance out supply and demand.
The drop in the oil price was blamed partly from U.S. oil coming into the world market through the advent of fracking, which made North America a fossil fuel giant in a few short years. It forced the Saudis to sell off assets to meet the budget shortfall. Next year it plans to begin selling shares of its national oil company, Saudi Aramco, with an initial public offering, which is a key part of the Saudi diversification plan.
The CEO forum will include Jeff Immelt, CEO of General Electric. The manufacturing giant pledged to make a $3 billion investment in the kingdom last year as part of the country's plan to diversify its economy away from oil.
Other CEOs will inlcude Andrew Liveris, chairman and CEO of Dow Chemical, which has eyed the kingdom's oil and natural gas resources as a prime opportunity to build out its chemical business there. Access to cheap and reliable natural gas and petroleum is a key consideration for any chemical operation to set up shop in a country. Dow is set to build a $20 billion chemical chemical complex in the kingdom.
Saudi Aramco is also expected to announce as much as $40 billion in new investments it will make in the United States during Trump's visit. Recently, Aramco become the sole owner of the largest U.S. refinery at the former Motiva complex in Port Arthur, Texas.
The list of Saudi cabinet heads at the meeting will include Khalid Al-Falih, minister of energy, industry and mineral resources; Majid Al-Kassabi, minister of commerce and investment and engineering; Mohammed Al-Jadaan, finance minister; Ali Al-Ghafis, minister of labor and social development; and a number of other Saudi senior officials, the official news service noted.
President Trump is not expected to attend the CEO forum. He will attend a number of other summits being held during his official state visit, including the Saudi-U.S. Summit and the Gulf Cooperation Council-U.S. Summit, and he is scheduled to deliver remarks at the Arab Islamic American Summit.