South Korean President Yoon Suk Yeol (2nd from L) and Saudi Crown Prince Mohammed bin Salman (2nd from R) walk to a meeting room at the Al Yamamah Palace in Riyadh on Oct. 22, 2023. (Image courtesy of Yonhap)
RIYADH, Oct. 22 (Korea Bizwire) — South Korea and Saudi Arabia will sign 51 deals and memorandums of understanding (MOU) worth a total of US$15.6 billion on the occasion of South Korean President Yoon Suk Yeol’s state visit to the Arab country, his office said Sunday.
Most of the agreements were signed Sunday during a bilateral investment forum and following a summit meeting between Yoon and Saudi Crown Prince Mohammed bin Salman, while the rest will be signed during a ceremony Monday marking 50 years of construction cooperation between the two countries, according to senior presidential secretary for economic affairs Choi Sang-mok.
The contracts and MOUs cover a wide range of sectors, including crude oil, hydrogen energy, statistics, food and medical products.
Among them is a contract between the state-run Korea National Oil Corp. and Saudi Arabia’s state-run oil giant, Saudi Aramco, to create a joint crude oil reserve of 5.3 million barrels at a storage facility in the South Korean city of Ulsan by 2028.
Under the deal, South Korea will have priority purchasing rights to the oil in a supply and demand emergency and earn rent over a five-year lease period.
South Korea’s Hyundai Motors and Saudi Arabia’s Public Investment Fund also signed a contract to jointly invest around $400 million in the construction of a car assembly plant in King Abdullah Economic City in Makkah Province, Saudi Arabia.
The plant will be designed to produce an annual 50,000 electric and gas-powered cars starting in 2026, becoming South Korea’s first electric vehicle production hub in the Middle East and an entry point for the wider Middle Eastern and North African markets, according to Choi.
During the investment forum, Yoon noted that this year marks 50 years since South Korean construction firms first entered the Middle Eastern market by winning contracts to build highways in Saudi Arabia.
“From roads and ports to refineries, anywhere we go in Saudi Arabia, we can easily come across facilities bearing the sweat and passion of the two countries’ companies,” he said before some 300 government and business officials from both sides, including a 130-member South Korean business delegation.
“The stable oil supply of Saudi Arabia, the biggest oil-producing nation, became a solid cornerstone for the Republic of Korea’s growth into a top 10 economy,” he said.
“If South Korea, which has cutting-edge technologies and a successful experience of industrial development, joins hands with Saudi Arabia, with its abundant capital and growth potential, we can create synergy stronger than any other nation,” he added.
South Korean and Saudi Arabian officials attend a bilateral investment forum at a hotel in Riyadh on Oct. 22, 2023. (Image courtesy of Yonhap)
The two governments agreed Sunday to a “hydrogen oasis cooperation initiative,” which calls for the establishment of separate working groups for each step of the hydrogen “value chain,” from its production to distribution and use, and systematically supports relevant projects between the two countries’ businesses.
In addition, the two countries’ statistics agencies signed an agreement on sharing information and material on statistical production.
Choi told reporters the new deals will add to the $29 billion worth of MOUs and contracts signed during the crown prince’s visit to Seoul last November.
He also said there were tangible results in more than 60 percent of the projects worth $29 billion, including in the groundbreaking of the “Shaheen” petrochemical plant project in Ulsan and the establishment of a $160 million joint venture capital fund.
Meanwhile, South Korean companies have participated in bidding for $25 billion of the total $500 billion worth of projects to be carried out in connection with Neom, an initiative to develop eco-friendly and smart cities in Saudi Arabia’s northwestern Tabuk Province.
“President Yoon plans to ask Crown Prince Mohammed for his active interest and support for South Korean companies to win contracts,” Choi said.
(Yonhap)
