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Aramco expects to boost capital spending by about 10 percent

Reuters  |  DAMMAM, Saudi Arabia 

By Reem Shamseddine

DAMMAM, (Reuters) - giant Saudi expects to increase its capital spending by almost 10 percent in its next financial year, a top official at the state-owned company said.

The plans to increase investment come as prepares for an international initial public offering (IPO) as part of Saudi Arabia's Crown Prince Mohammed bin Salman reforms to make the kingdom less reliant on

Aramco's senior vice president of technical services, Ahmad al-Sa'adi, told a business conference on Thursday that the company's allocation for capital spending in its current financial year is almost 350 billion riyals ($93 billion) and would rise by about 10 percent the following year.

Al-Sa'adi added that the rise in spending will provide big opportunities for Saudi contractors looking to increase their involvement with

Earlier, Britain said it will provide $2 billion in credit guarantees to Saudi so it can buy British goods and services more easily, but denied this was part of efforts to persuade it to list in London. [L8N1NF6EP]

Saudi continued spending on its energy projects despite falling prices.

On Thursday it signed agreements worth $4.5 billion with international engineering and construction firms; of which the biggest will boost gas production.

At the signing, Sa'adi said the six and gas agreements reflect the strong commitment of to boost gas production and maintain crude production capacity.

"still remains one of the most attractive markets for everybody, I think next year will offer a lot of opportunities as the market is improving," Daniele Quintarelli, the CEO of the Saudi unit of Saipem, said after the signing in Saudi of an agreement with Saudi to expand the Hawiyah gas plant.

In the Saudi construction sector, non-energy related projects were hit hard last year as the government, its finances strained by low prices, delayed paying contractors.

However, Saudi state finances have strengthened this year because of moderately higher prices and cost-cutting.

The contracting sector represents around six percent of Saudi GDP with a business volume worth 300-350 billion riyals, Sa'adi said in a statement.

According to forecasts, the sector is approaching steady growth to keep pace with the kingdom's industrial, service and housing expansion projects, the statement added.

(Reporting by Reem Shamseddine; Editing by David Goodman and Alexander Smith)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 10 2017. 01:41 IST