US eyes fresh investments in Saudi Arabia

New York: The US is seeking to boost investments by American companies in Saudi Arabia as the world's largest oil exporter spends to develop its infrastructure and expand its hydrocarbons production.

"There is a lot of opportunities and those opportunities are across the board," Francisco Sanchez, the Under Secretary for International Trade at the US Department of Commerce, told reporters in Riyadh, during a trade mission.

"In petrochemicals, there seems to be a heavy emphasis in investment. There seems to be a commitment to improve the health care system here."

The US is facing increasing competition from Chinese companies as the world's second-largest oil consumer forges closer ties with Gulf Arab countries to meet its energy demand.

China in November overtook the US as the main buyer of Saudi oil, and Saudi Arabian Oil and Saudi Basic Industries are investing in refining and petrochemicals projects in China.

Saudi Arabia, home to about a fifth of global crude oil reserves, is spending $400 billion (Dh1,469) over a five-year period, starting from 2009, to build infrastructure, expand energy production and boost economic growth.

Sanchez led a delegation of 11 companies, specialising in health care, waste water management and engineering. Cambridge, Massachusetts-based CDM, Dallas, Texas-based HKS and White Plains, New York-based ITT Water and Wastewater were among the companies looking for opportunities.

"My main purpose on this mission is to lead these 11 companies that are here to look for business opportunities," Sanchez said.

A delegation of 200 Saudi government and business leaders attended the US-Saudi Business Opportunities Forum in Chicago in April. Senior Saudi officials attended the event, including Oil Minister Ali Al Nuaimi and Finance Minister Ebrahim Al Assaf, and leading US companies, including ExxonMobil and Boeing.

Companies from China, Europe and the US are pursuing deals as the kingdom implements the largest stimulus package in the Group of 20 nations as a percentage of gross domestic product.

"In absolute terms, the US is the biggest trading partner with Saudi Arabia," John Sfakianakis, chief economist at Banque Saudi Fransi, said. "But they are losing market share. Chinese companies are competing on all fronts."

Trade between the US and Saudi Arabia was $67.3 billion in 2008, according to data provided on the website of the US-Saudi Arabian Business Council.