RIYADH: Crown Prince Mohammed bin Salman’s stop in Houston on Saturday will shift his focus to Saudi Arabia’s reliance on oil at a time when the kingdom looks to diversify its economy.
Houston often gets cited as the energy center of the United States, as the sprawling Texas city has thousands of refineries, petrochemical plants and natural gas fields.
It also has the largest refinery in the US – Motiva – which is owned by the kingdom’s oil company, Saudi Aramco. In addition, several giant energy companies – Shell, Exxon and others – have headquarters in Texas, and Houston in particular.
Ninety percent of the Saudi government’s budget and 45 percent of its GDP come from oil exports. The crown prince told Time Magazine last week that the country plans to “produce much, much, much [more] — a lot of barrels in the future”.
While the specific reasons for bin Salman’s visit to Houston remain murky and the Saudi consulate has yet to respond to MEE’s inquiries, a number of experts say he will probaly talk about investing in shale – a different form of crude oil – and in petrochemicals.
“I presume that it’s to talk to industry [executives] and to promote inward investment into Saudi Arabia, as well as to talk a little bit about the kingdom and Saudi Aramco’s plans for further investment in the United States,” a former Saudi Aramco executive, who wished to remain anonymous, told Middle East Eye.
The Saudis are attempting to reform their entire approach to society. They have to reform their entire approach to religion, which is the essence to their country. They want to change the people, which is tricky,” he said.
While Seznec expressed hope that MbS is successful in his endeavors, he cautioned that it may prove difficult for the young Saudi leader.
Other experts, like Krane, emphasised that he’s “not writing [the Saudis] off”, but said their diversification strategy is “not an easy project”.
“I think Mohammed bin Salman understands the issues pretty well, but there’s a lot riding on it. You have a lot of balls to juggle at the same time and it’s a pretty delicate balancing act to get all of this stuff done successfully,” he said.
Finally, the looming threat of climate change may derail Saudi’s entire agenda. Not only would a hotter climate imperil the ability to even live in parts of Saudi Arabia, which is already “about as hot as you can stand in the summertime…and stay alive”, but “if climate action drives down the demand for oil, the price” and resulting revenue will fall as well, Krane said.
“Oil and climate change are locked in a zero-sum game right now,” Krane said. “If you’re a country with 266 billion barrels of oil reserves that are supposed to last you for the next 70-80 years, you may not feel comfortable about the markets for oil 70 or 80 years down the road.
