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The Saudi government this week confirmed a SR40bn ($10.7bn) payment for debt arrears to the country’s contracting firms has been made. A further SR100bn ($26.6bn) will be paid by year-end it says. But damage to investor confidence has already been done.
The government has sought to shield the energy sector from these payment issues, but has not been entirely successful. The Petro Rabigh joint venture of Saudi Aramco and Japan’s Sumitomo last month confirmed that the Petro Rabigh 2 expansion had been pushed back to the second half of 2017 due to delays in the schedule and scope changes in the work program (MEES, 7 October). A contractual dispute with South Korea's SK Engineering & Construction led to the 400,000 b/d Jazan refinery being pushed back from late-2016 to 2018. (CONTINUED - 694 WORDS)