The sustained high oil price has been a boon to the kingdom offering unprecedented opportunities for diversification of the economy. Until 3 years ago, the country had struggled with years of budget deficits and remains beset by problems of high unemployment and political discontent. This year the kingdom is expected to enjoy a budget surplus of about US$30bn and oil revenues are expected to reach US$112bn.
The kingdom needs more foreign investment to achieve its ambition of increasing share of the global petrochemicals output from 7% to 13% over the next 5 years. The government has launched an investment drive to raise petrochemical production and stimulate the development of downstream industries that will boost employment in the kingdom.
PetroRabigh, a refinery and petrochemical complex at Rabigh on the Red Sea is being developed with Sumitomo Chemcials at an estimated capital cost of US$8bn. This is one of three petrochemical complexes being developed by Saudi Aramco with the aim of encouraging the growth of downstream industries.
Saudi has access not only to raw materials, but scores highly due to its proximity to the fast growing economies of Asia and India, giving it a competitive advantage over its European and US counterparts in the petrochemicals industries.
04-Oct-05 
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