Latest news with #YousefSaba
Yahoo
08-05-2025
- Business
- Yahoo
Explainer-Why does Saudi Arabia want a civil nuclear deal with the US?
By Yousef Saba DUBAI (Reuters) - Saudi Arabia and the United States are discussing a deal to cooperate on the kingdom's ambitions to develop a civil nuclear industry, talks that have long been complicated by regional politics and concerns over weapons proliferation. Here are some of the main issues at play: WHY DOES SAUDI ARABIA WANT A NUCLEAR PROGRAMME? As the world's largest oil exporter Saudi Arabia may not seem an obvious candidate for nuclear power, but it aims to reduce carbon emissions and free up crude for export under Crown Prince Mohammed bin Salman's Vision 2030 economic plan. The U.S. Energy Information Administration said last year that 68% of Saudi electricity was generated by burning gas and 32% by burning oil, with 1.4 million barrels a day of crude being used for power generation during the peak month of June. Atomic power could displace some of that, including for energy-intensive water desalination and air conditioning, allowing the kingdom to make more money from oil sales. However, Saudi Arabia has also said that if old foe Iran develops a nuclear weapon it would have to follow suit - a declaration apparently aimed at ramping up pressure on Tehran, but which has also fuelled concern about its own ambitions. In January it said it would enrich uranium - a process that can also be used as part of a military programme - to create 'yellowcake' fuel for nuclear power generation that it could sell. Any deal with Washington would likely address safeguards to assuage worries about military ambitions, on top of Saudi Arabia's existing commitment not to pursue a bomb under the nuclear Non-Proliferation Treaty (NPT). WHAT'S IN IT FOR THE UNITED STATES? There could be strategic and commercial gains. Civil nuclear cooperation was an important inducement along with security guarantees in an effort by Trump's predecessor Joe Biden to broker a deal for Saudi Arabia and Israel to normalize relations. However, those two issues are now uncoupled, Reuters has reported, though a nuclear deal could be a sweetener in U.S. diplomatic efforts with the kingdom. Riyadh has ruled out normalizing ties with Israel without Palestinian statehood. U.S. Energy Secretary Chris Wright met Saudi Energy Minister Prince Abdulaziz bin Salman in April and said the two countries were on "a pathway" to a civil nuclear agreement. He made no mention of a wider deal over other issues such as normalisation. A deal would put U.S. industry in a prime spot to win contracts to build Saudi nuclear power plants as well as providing insight into the kingdom's atomic programme that could alleviate any U.S. worries over weapons proliferation. Under Section 123 of the U.S. Atomic Energy Act of 1954, the U.S. may negotiate agreements to engage in significant civil nuclear cooperation with other nations. It specifies nine nonproliferation criteria those states must meet to keep them from using the technology to develop nuclear arms or transfer sensitive materials to others. U.S. law stipulates congressional review of such pacts. SAUDI ARABIA HAS OPTIONS Should the U.S.-Saudi talks fail, several countries with established nuclear industries have expressed interest or are seen as potential partners for Saudi Arabia's nuclear programme. State-owned China National Nuclear Corp (CNNC) reportedly submitted a bid in 2023 to construct a nuclear plant. Russia's state nuclear firm Rosatom, which built a nuclear plant in Egypt, has also signed preliminary cooperation agreements with Riyadh. Other potential contenders include South Korea, which built reactors in the neighbouring United Arab Emirates, and France. The choice of partner will likely depend on technological offerings, financing, and geopolitical alignment, including conditions related to nuclear fuel handling. URANIUM ENRICHMENT A key issue is whether Washington might agree to build a uranium enrichment facility on Saudi territory, when it might do so, and whether Saudi personnel might have access to it or it would be run solely by U.S. staff in a "black box" arrangement. Without rigorous safeguards built into an agreement, Saudi Arabia, which has uranium ore reserves on its territory, could theoretically use an enrichment facility to produce highly enriched uranium, which, if purified enough, can yield fissile material for bombs. Another issue is whether Riyadh would agree to make a Saudi investment in a U.S.-based and U.S.-owned uranium enrichment plant and to hire U.S. companies to build Saudi nuclear reactors. There are diplomatic issues too: Washington's top regional ally Israel has repeatedly voiced opposition to the idea of a Saudi civil nuclear programme.
Zawya
06-05-2025
- Business
- Zawya
Saudi Arabia, US to sign deal in mining, mineral resources, cabinet says
Saudi Arabia is set to discuss and sign a deal with the U.S. in the fields of mining and mineral resources, the Saudi cabinet said in a statement relayed by the country's state news agency on Tuesday. (Reporting by Jaidaa Taha and Yousef Saba; Editing by Jan Harvey)
Yahoo
08-04-2025
- Business
- Yahoo
Analysis-How the oil price plunge complicates Saudi Arabia's economic agenda
By Yousef Saba DUBAI (Reuters) - Saudi Arabia, with its wealth linked inextricably to oil revenue, faces mounting pressure to raise debt or cut spending after a plunge in crude prices, complicating plans to fund an ambitious agenda to diversify its economy. Oil prices have tumbled to near four-year lows on fears a trade war will hit global growth and after a surprise decision by some OPEC+ oil producers, including Saudi Arabia, to boost their output plans. The price decline threatens to erase tens of billions of dollars of Saudi revenue, along with a planned drop in dividends from state-controlled energy giant Saudi Aramco. The International Monetary Fund and economists estimate Riyadh needs oil prices of over $90 a barrel to balance its budget. Benchmark Brent prices slipped below $65 this week. VISION 2030While Saudi Arabia funds its Vision 2030 reform program off budget, the government needs to spend on mammoth infrastructure projects linked to the program, which aims to wean the economy off its self-declared "oil addiction." The $925 billion Public Investment Fund, which is steering Vision 2030, also partly relies on oil, including through its shares in Aramco. "Saudi Arabia is likely to rely on debt financing, and it will have to delay or scale back some planned contracting awards given 2024 was already in a twin deficit," said Karen Young, senior research scholar at Columbia University's Center on Global Energy Policy, referring to fiscal and current account deficits. Before the U.S. tariffs announcement, she said analysts had expected Saudi public debt to surge by $100 billion in the next three years. It jumped 16% to over $324 billion in 2024, official figures show. Aramco's dividends are also expected to fall by a third this year, meaning the government and PIF will receive about $32 billion and $6 billion less, respectively, Reuters calculations generated 62% of government revenue last year. Riyadh has not forecast oil revenue this year but in its 2025 budget released in November, it projected a 3.7% fall in total revenue. RECALIBRATINGPIF is also likely to seek additional financing, analysts said. The fund's Governor Yasir Al-Rumayyan said last year it intends to boost annual investments to $70 billion between 2025 and 2030 from $40-50 billion. PIF declined to comment. Saudi Arabia was among the largest emerging market debt issuers last year and the government has already raised $14.4 billion in bonds this year. PIF, which borrowed $24.8 billion last year via bonds and loans, has already raised $11 billion in 2025. Several other state-linked entities have also raised billions. PIF has ploughed hundreds of billions of dollars into the local economy, in everything from a camel dairy firm to NEOM, a gargantuan futuristic city in the desert. Projects ahead include the 2029 Asian Winter Games, set to feature artificial snow and a man-made freshwater lake, and the 2034 World Cup, for which 11 new stadiums will be built and others renovated. The finance ministry is "recalibrating and prioritising" spending to ensure the economy, including the private sector, can "catch up" while avoiding "overheating the economy," a spokesperson said. "We are assessing the recent developments and stand ready to take whatever policy decisions needed to ensure that our fiscal position remains strong," the spokesperson said. "We remain confident that most of our vision targets are either achieved or on track and we will deliver on the key events we are hosting." The plunge in oil coincides with geopolitical realignments as U.S. President Donald Trump upends a global economic order in place since World World II. Trump has pressured OPEC and its de facto leader Saudi Arabia to cut oil prices and urged Riyadh to invest $1 trillion in the United States. He is due to visit Saudi Arabia, Qatar and the United Arab Emirates on his first foreign visit in May. Lower oil prices "will likely lead to additional re-prioritisation of major projects, further rationalisation, revision of delivery timelines and a reduction in project work forces," said Neil Quilliam, associate fellow at the Middle East and North Africa Programme of London-based think tank Chatham House. Yet, the government is likely to view the short-term risk of lower oil prices as worth the long-term benefit, Quilliam said, noting the kingdom enjoys a low debt-to-GDP ratio and confidence from lenders. S&P raised Saudi Arabia's rating to 'A+' from 'A' last month, but said unfavourable oil price movements and more debt-funded investments were among factors that could lower that rating. Sign in to access your portfolio
Zawya
02-04-2025
- Business
- Zawya
Kuwait implements power cuts as demand outstrips restricted capacity
Oil-rich Kuwait temporarily cut electricity in some industrial and agricultural areas on Wednesday as demand for power surged due to hot weather, outstripping generating capacity that had been restricted by maintenance at power plants. Kuwait, a member of the Organization of the Petroleum Exporting Countries, last summer resorted to programmed load-shedding for the first time in years amid rising demand, urban expansion and plant maintenance delays. Wednesday's outages lasted less than two hours before electricity was restored, according to posts by the electricity ministry on X. Temperatures have risen by about 10 degrees over the past week to a high of around 38 degrees Celsius (100.4°F) on Wednesday. Summer temperatures in the Gulf country often exceed 50 degrees Celsius. The ministry asked residents to reduce their electricity use in general and especially between 11:00 a.m. and 05:00 p.m. (0800 and 1400 GMT). Kuwait imported electricity from the Gulf Cooperation Council Interconnection Authority, an interconnected grid between Gulf countries, last summer. In August, Kuwait Petroleum Corporation reached a deal with QatarEnergy to import 3 million tons per annum of liquefied natural gas to help meet rising demand for power generation. And as part of efforts to avoid a longer term power crunch, it also signed a framework agreement with China last month to develop renewable energy projects with a capacity of around 3,500 megawatts. (Reporting by Ahmed Hagagy; Editing by Yousef Saba and Joe Bavier)
Zawya
20-03-2025
- Business
- Zawya
Saudi Aramco launches first direct air capture test unit
Saudi oil giant Aramco has launched a pilot direct air capture unit able to remove 12 tons of carbon dioxide per year from the atmosphere, it said on Thursday. The facility, developed with Siemens Energy, is Saudi Arabia's first carbon dioxide direct air capture (DAC) unit and will be used to test CO2 capture materials, Aramco said. Critics of capturing CO2 emissions have said the technology is expensive and unproven at scale. "The test facility launched by Aramco is a key step in our efforts to scale up viable DAC systems, for deployment in the Kingdom of Saudi Arabia and beyond," Ali A. Al-Meshari, Aramco senior vice president of technology oversight and coordination, said in Aramco's statement. "In addition to helping address emissions, the CO2 extracted through this process can in turn be used to produce more sustainable chemicals and fuels." Aramco, the world's top oil exporter, aims to reduce its so-called Scope 1 and 2 emissions to net zero by 2050. Aramco announced the pilot DAC unit with Siemens Energy in October 2023 and said at the time it would be completed in 2024 and was intended to pave the way for a larger pilot plant that would have the capacity to capture 1,250 tons of CO2 per year. The state oil giant in December signed an agreement with oil services firms SLB and Linde to build a carbon capture and storage project in Jubail, Saudi Arabia. The first phase is expected to be completed by the end of 2027, capturing and storing up to 9 million tons of CO2 a year. Aramco has signed several other agreements to explore carbon capture development and last year took part in an $80 million funding round of Los Angeles-based CarbonCapture. (Reporting by Yousef Saba Editing by Mark Potter)
