Saudi Arabia's oil minister said the kingdom hopes to attract 40 billion Saudi riyals ($10.7 billion) from the private sector by 2013 to help it develop new industrial clusters as part of plans to diversify the country's economy and create jobs.
Saudi Arabia's industrial cluster initiative "seeks to attract, facilitate and develop a number of pivotal projects in four clusters by 2013," according to a copy of a speech given by Oil Minister Ali Al Naimi in Dhahran on May 13.
"The anticipated total investments by the private sector in all the projects of these clusters are estimated at SAR40 billion," Naimi said in the speech given at the founding meeting of the Saudi Society for Energy Economics.
The kingdom, the Middle East's largest economy and the world's top crude exporter, has identified industries in which the country "enjoys a relative advantage and which are associated in one way or another with the oil industry, including metal industries and the auto supplies industry," for development, according to the speech.
Such industries have the potential to create jobs in line with the country's national industry strategy and to maximize the benefits from Saudi Arabia's relative advantages, including the abundant availability of basic petrochemicals, phosphate and aluminum, Naimi said.
"The projects will contribute SAR90 billion to the gross domestic product annually and create some 160,000 employment opportunities by 2020," he said.
Naimi added the kingdom would also need to confront increased domestic consumption of petroleum products and natural gas due "to industrial expansion and the fact that prices are much lower than international levels."
"This energy consumption pattern in the kingdom will, if it continues, have an impact on both the volume of exports and the kingdom's income," he said.
The country would need to address the issue through "a national program for rationalization of energy consumption that will take into consideration the kingdom's condition, the growth phase it is passing through and the need to optimize utilization of energy in the various sectors," Naimi said.
This would "reflect the real cost of petroleum resources and its conservation for future generations," he added.
Rising demand for electricity and desalinated water would also require the kingdom to tackle the challenge of developing suitable alternative energy sources, Naimi said.
"Solar energy does represent a viable alternative that the kingdom is in a position to promote, not only to replace petroleum and gas in power generation and water desalination, but perhaps also in the long run to become a source of electrical energy," Naimi said.