S. Arabia seeks Indian investment in Yanbu, Jubail

Monday, 10 February 2003, 20:30 IST
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NEW DELHI: Saudi Arabia is eyeing Indian investment in the downstream petroleum sector in its two major industrial cities of Yanbu on the Red Sea and oil rich Jubail on the Arabian Gulf region. "We are looking for investment in downstream industries for making semi-finished and finished goods based on petroleum products," said Akili Khawaji, deputy director general (investment and development) of Royal Commission for Jubail and Yanbu. Khawaji, who is participating in the infrastructure show organised by the Confederation of Indian Industry (CII), is leading a five-member delegation on his first visit to promote the twin industrial cities. "The twin industrial cities are part of Saudi Arabia's drive to diversify the economy by leveraging the hydrocarbon resources to create industrial infrastructure," Khawaji told IANS. The two cities are linked by three pipelines for transportation of crude oil and gas from Jubail in the east to Yanbu in the west, covering a distance of 1,170 km. Saudi Arabia's oil reserves are estimated to be the highest, accounting for 25 percent of the global reserves. Jubail, located northwest of port town of Dammam, was the first to be developed 25 years back to facilitate processing of crude and export of primary and secondary petroleum products. Yanbu, located 350 km north of Jeddah, came up later to facilitate exports from the Red Sea coast. Both cities offer clean environment and all modern amenities for living and industrial activities, said the official. Yanbu being in close proximity to some of the most beautiful coral reefs in the world, the authorities have very stringent waste management rules for both industries and commercial establishments. "Of the 250 industries we already have in the two cities, 30 are major industries with investment of over $3 billion in each of them. "Several global majors like Shell and Exxon Mobil already have operations in our zones," said Khawaji. Since the Saudi decision to allow 100 percent ownership and full repatriation to foreign countries, the investment flow has increased considerably from the earlier six to eight percent average annual growth, the official said. So far there has been no major investments by Indians other than through joint ventures in the two cities which have all amenities right from housing to schools, colleges, hospitals, shopping malls and financial institutions. Indians account for about 1.5 million of the estimated seven million expatriate population in Saudi Arabia. "This is in the form of an exploratory visit and to showcase our facilities as we are keen to attract more investment from India, Malaysia, Indonesia and also tap the European market. "We are also looking for opportunity for strategic joint ventures, which will add value to the primary and secondary petroleum products being produced by existing industries," said Khawaji. While the Saudi authorities have done some feasibility studies on possible projects, Khawaji said the investors would have to do more in-depth study on the project cost and market potential. Khawaji's said though full ownership is permitted to potential investors a joint venture would be more advantageous as that would help the venture access easy loan facilities. "The local partner would also be able to guide better with his market knowledge in a joint venture."
Source: IANS
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