Saudi modernization creates growth opportunities for Texas energy sector

Houston Chronicle:
Saudi Arabia is undergoing revolutionary change with the sudden arrests of the princes and top ministers, triggering uncertainty in the Middle East, global oil markets and here in Houston, where the energy industry's ties to the kingdom are deep and long, stretching back for decades.

Whether the purge by 32-year-old Crown Prince Mohammed bin Salman sparks a civil war, ignites an armed conflict with Iran or peacefully drags the conservative Islamic regime into the modern world could have huge implications for Houston and its economy, beyond its impact on oil prices. Saudi Arabia is not only a major market for some of the region's biggest employers, including energy services companies Schlumberger, Halliburton and Baker Hughes, but also a large and growing investor in the Texas Gulf Coast as it seeks to diversify the Saudi economy and holdings.

Just this year, the Saudis' U.S. refining arm, Houston-based Motiva Enterprises, bought out Royal Dutch Shell's stake for $2.2 billion for sole ownership of North America's largest oil refinery in Port Arthur. The country's government-owned industrial company known as Sabic is investing billions more as part of a partnership with Exxon Mobil to develop a $10 billion petrochemical plant near Corpus Christi.

Sabic's CEO, Yousef Al-Benyan, calls Houston its hub for global growth after moving its Americas headquarters to Houston last year. Saudi Aramco, the state-owned oil company, has maintained its America's headquarters in Houston for 40 years. The Saudi companies employ well more than 1,000 people in Houston offices.

"I think (Salman) has hitched his wagon to the U.S.," said Chris Ross, a University of Houston finance professor focused on international oil.
...
His move to consolidate power less than six months after he was named crown prince by his father, King Salman bin Abdul-Aziz Al Saud Salman, coincides with his "Vision 2030" modernization plans to open Saudi's oil sector to foreign investors, while diversifying globally, especially along the Texas Gulf Coast. The crown prince also plans to take Saudi Aramco, valued at some $2 trillion, public as soon as next year, possibly on the New York Stock Exchange.

If the younger Salman succeeds in opening the Saudi economy and society, it likely will mean more opportunities for U.S. and Houston energy companies,

But, said Bruce Everett, an adjunct associate professor of international business at Tufts University, "if he can't pull this off, and there's a civil war within the House of Saud, all bets are off. Who knows what can happen."
...
There is more.

It is not just modernization of the industry and finance of the Kingdom that he is changing.  He is also trying to reign in the radical elements of Islam that have a home in Saudi Arabia.  In dealing with the strategic threat posed by Iran to the region, he is open to an alliance with Israel to deal with Iran's move to hegemony in the region. 

The Saudis have also told the Palestinians that they better accept the deal the Trump administration is proposing for a two-state solution or they will be cut off.  The changes the Price is proposing are revolutionary for the country and the region.  If he is successful it will be good for his country and its alliance with the US.

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