MOSCOW, October 5. /TASS/. Russian President Vladimir Putin will meet on 5 October, the negotiations with the king of Saudi Arabia Salman bin Abdulaziz al Saud, who is in Russia on a state visit. As reported TASS the press service of the Kremlin, “will discuss whole range of issues of Russian-Saudi cooperation, the leaders consider joint steps to further enhance bilateral cooperation in trade-economic, investment and cultural-humanitarian spheres.”
It is expected that the sides will also exchange views on international issues. “Special attention will be paid to the situation in the middle East and North Africa, with a focus on resolving the region’s continuing conflict situations”, – stated in the message of press-service.
As previously noted the press-Secretary of Russian leader Dmitry Peskov, the parties have the political will to develop economic relations. “The prospects are very broad, the potential is far from being solved; now both sides have the political will to promote development of business contacts”, – said the representative of the Kremlin. “Relations between Moscow and Riyadh is a separate vector of our foreign policy, on the basis of how important place is occupied by Saudi Arabia in the region and in the Arab world as a whole”, – said Peskov. “Certainly, Russia is interested to maintain a dialogue, including within the discussion of the situation in the Middle East and in Syria in particular,” he said.
As said before at the panel discussion “Russia’s energy week,” the Russian leader himself, he intends to discuss with the king of Saudi Arabia the question of the extension of the agreement to reduce oil production from OPEC countries and countries outside the cartel. “We are in contact with our key partners and with OPEC as a whole, and with the major manufacturers. Here, we will have the pleasure and honor to host the king of Saudi Arabia very soon in Russia. Also, of course, we say [about the extension of the agreement with OPEC],” said the President.
In addition, according to the statement by the press Secretary of the President, among the topics – the military-technical cooperation (MTC).
On the negotiations
The upcoming talks will be held in the Grand Kremlin Palace. The official ceremony will be held at the St. Andrew hall. The two heads of state will exchange greetings and give each other the delegations of their countries. Conversation of the President and king in the narrow part will be held in the Green room, after which negotiations will continue with the participation of members of delegations.
On the Russian side, they are scheduled to participate, in particular, Deputy Prime Minister Dmitry Rogozin, foreign Ministers, trade and industry, communications and mass communications, energy, and the heads of several Russian regions, representatives of large business, in particular, the heads of Rosneft and Rostec.
Following the talks, planned to sign joint documents, in particular we are talking about the number of landmark deals in energy, infrastructure construction, high technology and other sectors of the economy, which in the opinion of many experts will lead the relations between the two largest producers and exporters of oil in the world at the level of strategic partnership.
Prospects for economic cooperation
Russia and Saudi Arabia, which together produce 25% of world oil in September 2016 signed an agreement on joint actions to maintain stability in the oil market. This agreement made it possible to establish agreement among producing countries to reduce output, which stabilized the price of oil on the world market after a sharp fall. Joint work on the agreement has opened up Russia and Saudi Arabia new opportunities in the sphere of economic cooperation.
According to General Director of the Russian direct investment Fund (RDIF) Kirill Dmitriev, the volume of investments of Saudi Arabia in Russia will exceed $1 billion after the announcement of new deals during the visit. RDIF and sovereign Fund Saudi Arabia Public Investment Fund (PIF) signed the 2015 agreement to establish a joint Fund with volume of $10 billion, which has already invested in projects in agriculture, real estate, infrastructure construction and the oil and gas sector.
“Investments in Saudi partners to the time of the visit, had already made $1 billion, we’ll announce new deals that will increase this figure,” – said Dmitriev. “This is a very important visit, the king is coming a very impressive delegation of Ministers and businessmen. We believe that this meeting brings relations between Russia and Saudi Arabia to a qualitatively new level,” he said.
Dmitriev and other Russian participants noted the special role of the crown Prince of Saudi Arabia Mohammed bin Salman al Saud in the rapprochement between the two countries.
The parties also will discuss Russia’s participation in the implementation of the Saudi reform plan “Vision 2030”, the author of which is the crown Prince. The plan envisages privatization of shares in the largest oil company in the world Saudi Aramco, the diversification of the economy, heavily dependent on the extraction and export of oil, as well as investment in projects in energy, infrastructure and technology around the world.
As one of the steps to implement this plan PIF and the Japanese Softbank has already created the world’s largest Fund for investment in technology Softbank Vision Fund $93 billion, the Fund may consider investment in major high-tech projects in Russia.
The volume of trade between Russia and Saudi Arabia remains small. According to the Ministry of economic development, trade turnover between the countries increased by 30% during the first half of 2017, compared to the same period last year, amounting to $430 million According to most experts, these figures do not correspond to the potential of trade-economic cooperation between the two countries.
The economic development Ministry has written to Saudi Arabia’s draft roadmap for the implementation of joint projects, which will be discussed in detail at the meeting of the Russian-Saudi intergovernmental Commission under the chairmanship of the Minister of energy Alexander Novak and Minister of trade and investment Saudi Arabia Majed bin Abdullah al – Qasabi, this meeting will be held in late October in Riyadh.
RDIF and sovereign Fund Saudi Arabia PIF is also working on creating a Fund of $1 billion for investment in energy assets. According to Dmitriev, the Fund could invest in Russian company Eurasia Drilling and other Russian providers of services for exploration and production of oil and gas as well as oil and gas equipment manufacturers. Saudi Saudi Aramco for the first time took in this year’s participation in the Russian exhibition “Innoprom” in Yekaterinburg, where he held a number of negotiations with Russian manufacturers of the equipment.
During the visit, held a joint investment forum, which will be attended by more than 200 companies including the world’s largest oil company Saudi Aramco and the Russian “Gazprom Neft”, “SIBUR”, “Aeroflot” and “FosAgro”.
This forum will be attended by the co-chairs of the intergovernmental Commission, the Ministers Novak and Majed bin Abdullah al-Qasabi. The forum will also act as Minister of energy, industry and mineral resources Khalid al falih, managing Director of the largest sovereign Fund in the world, Public Investment Fund (PIF), Yasser ar Ramayana, and also the head of RFPI Dmitriev.
As stated ahead of the visit of Novak, “Gazprom Neft” plans to sign with Saudi Aramco Memorandum of cooperation to establish a joint research center, and the company “SIBUR” can sign a Memorandum on cooperation in implementation of joint petrochemical project in Saudi Arabia. The Minister stressed that the petrochemical industry is one of the most promising directions of economic cooperation between the two countries.
The largest Russian oil company “Rosneft” will discuss with Saudi Aramco joint trade oil on the world markets.
The visit of the delegation of Saudi Arabia will be in the days when Moscow will host international forum on energy saving and energy development “the Russian energy week” (REN), which will be attended by energy Ministers from half of the countries of the Organization of countries-exporters of oil (OPEC). At the forum, Novak will hold talks with the Minister of energy, industry and mineral resources of Saudi Arabia, Khaled al-Faleh.
Many experts believe that the success of the state visit of king of Saudi Arabia will open the door for multi-billion dollar Saudi investments in the Russian economy, which lost part of foreign investments due to anti-Russian sanctions of the European Union and the United States.
Military-technical cooperation with Saudi Arabia
Among the topics that may be discussed at the talks in Moscow, – military-technical cooperation. Over the past few years, Saudi Arabia has shown interest to a wide range of Russian armaments, particularly tanks T-90, combat vehicles infantry, air defense systems, tactical missile systems and military helicopters, however, the firm contracts were concluded. In December 2015, Putin said that Moscow is considering a multibillion-dollar joint projects in the sphere of military-technical cooperation with Riyadh.
In early 2017, the Deputy defense Minister of the Russian Federation Alexander Fomin at the meeting with Deputy chief of General staff of Saudi Arabia Lieutenant General Fayyad Hamid ar-Ruwaili reported that the Riyadh have “a long list of wishes into a possible procurement of the most modern weapons”. In July the General Director of state Corporation “rostec” Sergey Chemezov in an interview with TASS said the signing of the Russian Federation and Saudi Arabia the preliminary agreement in the sphere of military-technical cooperation worth $3.5 billion US.