Economy

Russia, Saudi Arabia to set up $1 billion technology fund

Russia, Saudi Arabia to set up $1 billion technology fund”

The visit, including talks in the Kremlin with President Vladimir Putin, reflects a rapid deepening of ties between Russian Federation and Saudi Arabia, driven by a mutual need to stem a drop in global oil prices. The prospect of extended production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russian Federation helped support prices.

The MoUs were signed as part of the Royal visit to Russian Federation by Saudi Arabia's King Salman bin Abdulaziz Al-Saud.

"We're looking at both", he said.

Saudi Arabia is competing with Iraq to be India's top oil supplier, with Iraq displacing it for a fifth month in a row in August, data compiled by Reuters showed.

His son, Prince Mohammed bin Salman, visited in May just before his elevation to crown prince, and in 2015 the countries' sovereign wealth funds agreed to $10 billion in investments.

The MoU will enable Saudi Aramco and Gazprom, Russia's premier gas company to develop a significant business portfolio in global upstream gas, allowing the introduction of new vendors and suppliers to the kingdom's market.

"Today that has changed 180 degrees". Having to compete with Russian Federation in future sales will likely be unwelcome news.

Hosting the Saudi king in the ornate Kremlin interiors, Mr Putin hailed his visit as a "landmark event" that will give a "strong impulse" to bilateral ties.

Moscow said last month it had discussed with Riyadh extending the deal but no specific decisions had been made ahead of a November 30 producers' meeting in Vienna.

Saudi Arabia is buying the Russian S-400 air defence system along with other military hardware under an MoU signed with Rosboronexport.

Russian Energy Minister Alexander Novak said in an interview broadcast on Monday that the planned $1-billion fund to invest in energy projects was part of efforts to strengthen cooperation in oil, gas, electricity, renewable energy and other projects.

The Public Investment Fund of Saudi Arabia announced in March establishing a new national company for military industries, Saudi Arabian Military Industries, which represents a significant component of Vision 2030 and a transitional point in the development of military products and services that meet the highest worldwide standards.

He said details were still being discussed.

He also drew attention to the fact that the Saudi Russian relations are now at an historic point, as they have become institutional ties including numerous ministries and sectors, noting the investments launched and their role in enhancing trade between the two countries.

Nasser said Saudi Arabia was also hoping to build greater research partnerships with Russian Federation.

Cooperation between Gazprom Neft and Saudi Aramco envisages collaboration in various areas, including drilling and well workover technologies, improvements to pumping systems, and the development of large-scale non-metal pipes.



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