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FWIW, I don't like the statement "KSA needs 80USD per barrel to break even". It's too blunt, and obscures lots of variables, including their bond market, their
by aliswe 7y ago
FWIW, I don't like the statement "KSA needs 80USD per barrel to break even". It's too blunt, and obscures lots of variables, including their bond market, their megaprojects that aren't really being paid for (yet) as they haven't started at full scale, fluctuations of external work forces, the operations in Yemen, etc etc ... were these parameters included or not? Were they compensated for in any way? I don't know the answer to those questions, although a lot of people must do. In any case, those parameters have undisputably changed since this claim was first made. And I really doubt "the Saudis" (... all 30 million of them ...) would agree to the 80USD per barrel figure.
Also, it most probably means that AT CURRENT PRODUCTION VOLUMES, ie. artificially low, they would need x USD per barrels. With more production, whatever that figure was, it will now be lower.
- DyslexicAtheist 7y agowhat kind of mega projects are they involved in outside oil? I learned that they invested 40B in the SoftBank fund. Is this what you're referring to? Where would I look or what should I read to learn more about this? thanks
- PopeDotNinja 7y agoThey're building a bunch of new cities: https://www.index-saudi.com/more-info/saudi-mega-projects/ https://www.index-saudi.com/more-info/saudi-mega-projects/
- DyslexicAtheist 7y agothanks for this
- aliswe 7y agoPlease note that these projects are not all governmentally funded and thus do not burden the state budget (affecting the x-usd-per-barrel-or-bust number) per se - Jeddah Tower is built "privately" by prince Waleed and his company if I'm not mistaken. But, the list does match the OP title "The Saudis ..." ... hehe ...
- edmundsauto 7y agoIt was my understanding there isn't much difference between the prince and the company and the country. Is that inaccurate?
- PopeDotNinja 7y agoIf the state owned oil companies pay a lot to the royal family, that's kind of like you owning the company and setting your own salary to whatever you want. There's a difference on paper, but not in spirit (to me anyway).
- aliswe 7y agoJust as an example, Prince Waleeds fortune is more or less self made. Furthermore, his company "Kingdom Holding" (IIRC) is to my knowledge not owned by the government (but it's a public company so that big investment fund - is it called the PIF? - could theoretically buy KH stock.) Some of those real estate projects look private to me.
- aliswe 7y agoDunno about good sources, but Neom and Qiddiya AFAIK still have prospected budgets of 500 billion dollars, each. This is of course an approximation and the actual amount is in a state of flux, so these are just two mega-parameters that are obscured by the x-dollars-or-bust statement that I hear so often.
- woodandsteel 7y agoOk, 80USD is only approximate. But in the context of a discussion of the government's pricing strategy, that is probably good enough.
- aliswe 7y agoIs the figure from before or after the Yemen offensive winded down?