Improving oil prices will be welcome news for oil and gas producers in the Middle East and Africa as they will increase upstream and infrastructure spending.
Saudi Arabia’s 2017 budget projects the deficit to fall by 33% on an annual basis, to $52.8 billion. This is despite the kingdom’s plans to spend $237.3 billion in 2017 – an increase of almost 8% over 2016. The Saudis have assumed an average Brent crude price of $55 per barrel this year, and expect to fund the deficit by issuing debt in addition to drawing down on foreign reserves. Some of the spending is likely to be targeted at boosting the kingdom’s non-associated gas output and building gas-to-power infrastructure.
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