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Russia & Saudi Arabia seal major deals & sign OPEC+ long-term cooperation charter

-By Julius Ogar

More than 20 deals have been signed on Monday between Moscow and Riyadh during President Vladimir Putin’s state visit to Saudi Arabia.

The agreements include the charter for long-term cooperation between the Organization of the Petroleum Exporting Countries (OPEC) and non-cartel oil producers. Along with the charter, the two countries have signed a protocol on energy cooperation.

The Russian Direct Investment Fund (RDIF), Saudi Basic Industries Corporation (SABIC), and ESN Group agreed to invest in designing, building, and operating a methanol plant in Russia’s Far East, in the Amur region. The plant is expected to have an annual capacity of up to 2 million tons, according to RDIF.

Russia’s sovereign fund along with Saudi Arabia’s Public Investment Fund and German investment group KGAL have agreed to invest $600 million in setting up a joint firm, called Roal, which will lease passenger jets in Russia.

RDIF said Saudi Arabia’s sovereign wealth fund PIF will contribute to an investment in NefteTransService (NTS), Russia’s major railroad rolling stock operator, worth up to $300 million. RDIF CEO Kirill Dmitriev praised cooperation with PIF in Russian railroad logistics sector as a “testament of close collaboration.”

“We support the expansion of NefteTransService’s business as one of the leading players in the railway logistics market,” said Dmitriev.

RDIF, PIF, and the world’s most valuable company Saudi Aramco have also signed transaction documents to acquire a 30.76% shareholding in Russia’s Novomet, which is one of the leading producers of oil-submersible equipment.

The investment will be completed upon approval from Russia’s Federal Antimonopoly Service, RDIF said. This will be the first joint investment of RDIF and Saudi Aramco within the framework of the energy platform, which was created in 2017 with PIF participation for the sake of investing in Russia’s energy sector and possibly localizing business in the Middle East and Saudi Arabia afterwards.

“RDIF, in partnership with Saudi Aramco and PIF, will support significant growth of Novomet’s business both in Saudi Arabia and other key markets in the Middle East,” said Dmitriev.

“The company will be able to expand its pipeline of orders for the production and maintenance of equipment and further develop its product line,” he added.

Russia and Saudi Arabia have also agreed to the mutual expansion of agricultural and food products exports. The two sides signed a memorandum which, according to the head of the Russian Ministry of Agriculture, Dmitry Patrushev, provides for an increase in the supply of cereals, live animals, livestock products, food, fish products, shrimp, fruits and dates, niche crops, and forage grasses.

“Russian companies are interested not only in increasing trade volumes for traditional types of products, but are also ready to expand its range. We see prospects, including in terms of increasing supplies of poultry, beef, and mutton. We are ready to increase deliveries of oil and fat, dairy, flour products, and confectionery,” Patrushev said.

Meanwhile, a statement of intent was signed between Russia’s state space corporation Roscosmos and the Saudi Space Commission, on cooperation in financing space exploration and the GLONASS global navigation satellite system.