Saudi looks to future, but oil the saviour once again

Future Investment Initiative was designed to showcase a future away from oil, but it was oil and old allies that rescued Saudi from the furore over Jamal Khashoggi.

RIYADH - Saudi Arabia's investment forum was designed to showcase the kingdom's new future away from oil, but it was black gold and old allies that rescued this week's event from the furore over the killing of journalist Jamal Khashoggi.

Riyadh inked multi-billion dollar agreements, mainly energy deals, despite a boycott of the event by dozens of high-level Western politicians, bankers and top executives scheduled to speak at the three-day gathering that ended on Thursday.

Saudi energy minister Khalid al-Falih even claimed that foreign companies which boycotted the forum have "apologised" and vowed a return to normal ties.

Yet the event was subdued in comparison to the 2017 inaugural investment conference, when robots roamed the venue as the kingdom turned its focus to the promise of new technology and announced plans to build a $500 billion mega city of the future.

Crown Prince Mohammed bin Salman, the de facto Saudi ruler, told Bloomberg earlier this month that Riyadh would announce an "amazing deal" at the Future Investment Initiative (FII) forum this year, vowing "big numbers" in a sector "far away from oil".

When the final session ended, no such announcement had been made.

"It's going back to old economy while the FII was supposed to be about the future. Old economy coming to the rescue of the new economy," said one participant at the investment conference.

Saudi Arabia signed 25 agreements on Tuesday worth more than $55 billion in the energy, petrochemicals, infrastructure and transportation sectors.

Out of the total, state oil giant Saudi Aramco alone signed memoranda of understanding worth $34 billion with some of its key longtime partners such as France's Total, and international service companies Schlumberger, Halliburton and Baker Hughes.

Asked by reporters about the impact of the Khashoggi killing on Aramco, chief executive Amin Nasser answered with a question of his own: "How much did we sign today?... How much was signed by Aramco? 34 billion dollars."

But another conference attendee said that the lack of high-tech investments was "palpable".

"It was like 'Aramco to the rescue'. They pulled out old deals... put al-Falih, Nasser and Total up on stage, and had them sign stuff that those who know energy already knew."

Total signed deals for engineering studies to build a petrochemical complex in Jubail, where it already has a refinery venture with Aramco on the eastern coast of Saudi Arabia.

It also signed an agreement for a possible investment of a retail service station network with Aramco. Both announcements are not new and have been in the works for months.

Test of friendship

The French oil major's Chief Executive Patrick Pouyanné issued a statement in support of Saudi Arabia, which is facing one of its toughest political crises in decades, before he flew to Riyadh to take part in the event as a panelist.

"Some business leaders have decided that the circumstances do not allow them to visit Riyadh. I respect their choice. Total has never been in favour of sanctions and isolation - for example, against Russia, Iran or Qatar - and nor do we support boycotts," Pouyanné said.

"Total has partnered with Saudi Aramco for 40 years."

Several Western countries including key ally the United States were discussing the prospect of sanctions against the world's top oil exporter.

But Russian President Vladimir Putin, whose country has been cooperating closely with the kingdom on oil markets, said he could not justify ruining relations with Riyadh.

Russia sent a delegation of more than 30 entrepreneurs and leaders of major Russian companies to the FII.

Riyadh and Moscow are leading the so-called OPEC+ alliance in managing the oil market and the two major producers coordinate on output policies closely.

In addition, few senior executives from China and Japan announced they were withdrawing from the event, putting pressure on Western firms to maintain a presence or risk losing business.

And African and Arab leaders, including close ally King Abdullah of Jordan, rallied around Riyadh. Leaders from Bahrain, the United Arab Emirates and Lebanon walked beside Prince Mohammed as he entered the main hall on Wednesday.

The prime minister of Pakistan, the presidents of Gabon and Senegal and the deputy prime minister of Ethiopia spoke onstage.

On the first day, Saudi officials thanked friends who came.

"Let me first express my appreciation and gratitude for the many friends and partners who are with us today as we all know these are difficult days for us in the kingdom of Saudi Arabia," said Falih.

"We are going through a crisis of sorts."

On Wednesday, Prince Mohammed broke his silence about the killing of Khashoggi, one of his prominent critics, vowing to bring those responsible to justice.

Striking a defiant tone, he took the stage for a panel discussion, touting Saudi Arabia's reform drive and highlighting the promise of Middle East economies, even Qatar's with which the kingdom is in a protracted dispute.

"Any success for the kingdom of Saudi Arabia is very contagious to the region," said Bahrain Crown Prince Salman bin Hamad al-Khalifa.

In a remark that played well in the main conference chamber, where Saudis formed a larger proportion than in 2017, Prince Mohammed added: "I think that the new Europe is the Middle East."