Saudi Arabia to move $925 billion away from megaprojects

Saudi Arabia is set to move $925 billion of its sovereign wealth fund away from real estate megaprojects that had taken over its development for the last ten years, Reuters reported on October 29th.

Crown Prince Mohammed bin Salman unveiled his Vision 2030 plan in 2016 in a bid to shift the economy towards big real estate projects.

The initial strategy consisted of developments such as NEOM, a project for a city in the desert by the Red Sea and a plan to host winter sport competitions in the country’s northern mountains, with ski slopes mostly using manmade snow.

The Public Investment Fund (PIF), has been a key contributor for funding these projects but they have faced repeated delays.

The Kingdom’s new strategy aims to focus on other current developments, such as logistics, mineral exploitation as well as religious tourism.

It was reported on October 11th that Saudi Aramco halted expansion plans for three chemical projects due to weak oil prices.

The Saudi-listed oil producer is holding back two joint venture projects at Yanbu on Saudi Arabia’s western Red Sea coast and another facility at Jubail on the Persian Gulf coast.

But Aramco has reportedly prioritised investment in global refining and chemical facilities in a bid to meet its goal to turn 4 million barrels a day of crude into petrochemicals.

It was reported on October 14th, that the company completed the acquisition of a 22.5% stake in its refining and petrochemicals joint venture Petro Rabigh.

The oil company acquired Petro Rabigh from Japan’s Sumitomo Chemical for 2.63 billion riyals (£547 million) and increased Aramco’s stake in the petrochemical company to roughly 60%.

Aramco also held a bilateral meeting with India in an attempt to strengthen cooperation in the chemicals and petrochemicals sector.

Bilateral trade between the two countries stood at $42 billion (£31 billion) during 2024 to 2025, with chemicals and petrochemicals contributing roughly 10%.

Reuters, Maghrebi.org