BEIJING • Saudi Arabia's King Salman Abdulaziz Al Saud oversaw the signing of deals potentially worth US$65 billion (S$91.3 billion) while kicking off a visit to Beijing yesterday, as the world's largest oil producer looks to cement ties with the world's second-largest economy.
The octogenarian monarch, who has overseen the launch of an ambitious economic reform plan since his accession two years ago, is on a month-long Asian tour.
The visits to countries that are some of the world's fastest-growing importers of Saudi oil aim to promote investment opportunities in the kingdom, including the sale of a stake in its giant state firm Saudi Aramco.
Saudi Arabia has sought to boost oil sales to China, after losing market share to Russia last year, by working mostly with China's top three state oil firms.
Chinese President Xi Jinping told King Salman in Beijing's cavernous Great Hall of the People that his visit showed the importance the King attached to relations with China.
"This visit will push forward and continue to improve the quality of our relations and bear new fruit," Mr Xi said in comments in front of reporters.
China's Deputy Foreign Minister Zhang Ming said that the memorandums of understanding and letters of intent could be worth about US$65 billion, involving sectors from energy to space, but he did not give details.
"President Xi Jinping and King Salman are old friends," Mr Zhang said.
"Practical cooperation between China and Saudi Arabia has already made major achievements, and has huge potential."
For Saudi Aramco, the potential investments fit with its strategy to expand its refining and chemicals portfolio in its bid to diversify assets and secure long-term agreements for its oil.
The two countries have held talks for China's sovereign wealth fund and largest energy company to invest in the initial public offering (IPO) of Saudi Aramco, according to people with knowledge of the matter.
China Investment Corp would be the Asian nation's principal investor in the planned flotation by Saudi Aramco, according to the sources, who asked not to be identified because the talks are private.
China National Petroleum Corp may also invest in the IPO, they said.
No formal agreement has been reached, according to the sources.
Meanwhile, a memorandum of understanding with state-run Norinco will look into building refining and chemical projects in China, while Saudi Basic Industries Corp and Sinopec have agreed to develop petrochemical projects in China and Saudi Arabia.
The Norinco deal could involve exploring the possibility of a greenfield refinery and chemical plant in Panjin, in Liaoning province, while also upgrading a refinery and petrochemical facility in the same location, an industry source said.
REUTERS, BLOOMBERG
