Saudi Arabia’s oil sector to grow by 1.6 per cent in 2019: Jadwa Investment

10400214495 48bb674881 zSaudi Arabia’s economic growth is expected to reach two per cent in 2019, said Jadwa Investment, a capital market company

Jadwa Investment’s Saudi economy in 2019 report added that the largest sector in the economy, the oil sector, which accounted for 44 per cent of GDP in real terms at the end of 2018, is forecasted to grow by 1.6 per cent, resulting in overall GDP growth of 2 per cent in 2019.

The report stated that while Saudi crude oil production is expected to remain unchanged on an annual basis in 2019, partly as a result of compliance with the OPEC+ agreement, oil GDP will be boosted by an increase in gas production and the opening of the Jazan refinery.

On the fiscal side, the company expects Brent oil prices to average US$66 per bbl and Saudi crude oil production to average 10.3 mbpd in 2019, resulting in oil revenues equal to US$166bn, or US$9.8bn lower than the government’s estimated revenue of US$176bn.

It further added that Saudi crude oil production is expected to rise to 10.5 mbpd, pushing the oil sector’s GDP to 2.1 per cent by 2020.

According to the report, one of the major developments in 2020 will be the continued implementation of the energy price reform, as detailed in the original FBP document and reiterated in subsequent updates. According to the FBP schedule, natural gas/ethanol and LPG prices will see a gradual transition to a yet-to-be-determined reference price next year.

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