OIL: Saudi Estimated Spending Plans for Oil Industry Revised Lower: Goldman

Saudi Arabia’s spending plans for the oil industry are expected to be lower than initially predicted, according to Goldman Sachs cited by Bloomberg. 

• The kingdom faces the rising threat of a widening budget deficit with production down at 9mb/d and Brent prices near $80/bbl with the government still reliant on hydrocarbon revenue.
• Around 73% of total investments will likely be directed to non-oil sectors by 2030, up from a previous estimate of 66%. Saudi Arabia’s goal is to invest $1 trillion in strategic sectors by the end of the decade.
• The kingdom focuses on industries that enable its diversification including metals and minerals, transport and logistics, and digitalization to reduce reliance on crude sales. 
• Capex in the oil sector is likely to shrink by $40 billion by 2028 but natural gas continues to be “a key contributor to the country’s decarbonization, economic development, and diversification plans,” Faisal AlAzmeh said.