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Russia, Saudi Arabia agree new cooperation on oil services, petchems


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Moscow — Russia and Saudi Arabia signed new cooperation agreements covering oil services and petrochemicals Monday, on the sidelines of Russian President Vladimir Putin's state visit to Saudi Arabia.

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Cooperation between the two countries has increased in recent years, with bilateral energy agreements emerging alongside the establishment of the OPEC/non-OPEC crude production agreement.

The Russian Direct Investment Fund, Saudi Aramco and Saudi Arabia's Public Investment Fund agreed to acquire a 30.76%stake in Russian services company Novomet from Rosnano. Novomet has an estimated 3.9% share of the global oilfield equipment market, producing oil-submersible equipment in Russia and abroad, RDIF said.

The consortium hopes to close the deal early next year, subject to regulatory approvals and closing conditions, Aramco said in a statement.

The deal marks the first joint investment by RDIF, Saudi Aramco and PIF through their energy investment platform set up in 2017.

The platform was set up to invest in Russian companies with a view to subsequent transfer of some business to Saudi Arabia and the Middle East.

The consortium has already worked with Novomet, supporting equipment supplies to Saudi Arabia in 2018, RDIF said.

Aramco said that it signed other agreements Monday for equipment and chemical suppliers with Angara Service, Chelpipe, Galen, Integra, NKT, Technovek, TMK and Intratool.


Separately RDIF agreed with SABIC and Russian private equity group ESN to invest in design, construction and operation of a methanol plant in the Amur region.

The plant's annual installed capacity is expected to be up to 2 million mt a year of methanol and will benefit from government investment incentives.

"Due to sizable Gazprom investments in developing gas infrastructure and the introduction of government measures to attract investment, there is a tremendous opportunity for implementation of world-class investment projects in the Russian Far East," Chairman of the Board of Directors of the ESN Group, Grigory Berezkin, was quoted as saying in an RDIF statement.

SABIC CEO Yousef Al-Benyan described the agreement as an important milestone in the company's global growth strategy.

"Russia is important to our global expansion plans, which have been formulated around competitive feedstock and our capacity to innovate and plan strategically," Benyan said.


RDIF and PIF are also considering investment in NefteTransService, one of the largest Russian operators of railway rolling stock.

"The investment of up to $300 million is aimed at expansion of NTS' fleet of rolling stock and strengthening its position in the railway logistics market," RDIF said.

NTS is one of the largest transporters of oil products in Russia.

Russia and Saudi Arabia have also established a Russia-Saudi Economic Committee, that will take a leading role in developing economic and trade ties as well as investments between Russia and Saudi Arabia across all sectors, RDIF said.

The Committee is Co-Chaired by Kirill Dmitriev, CEO of Russian Direct Investment Fund (RDIF, Russia's sovereign wealth fund) and HRH Prince Abdullah bin Bandar bin Abdul Aziz, the Kingdom's National Guard Minister.

"We expect investment on both sides to grow exponentially after the Committee's first meeting today," Dmitriev said, according to an RDIF statement.

-- Rosemary Griffin,

-- Edited by Jonathan Dart,