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SAUDI GOVERNMENT TO SLASH OUTLAYS 20%

Jan. 10, 1994

Saudi Arabia's government will cut spending by 20% this year in an attempt to balance its books. A budget statement said the government plans to spend 160 billion riyals ($43 billion U.S.) during the year, London's Financial Times reported. The budget estimated the year's revenues, virtually all from oil and petrochemical exports, at 155.6 billion riyals ($41.8 billion). Riyadh economists were reported to have said the budget implies a price of $15/bbl for Saudi export crude and

Saudi Arabia's government will cut spending by 20% this year in an attempt to balance its books.

A budget statement said the government plans to spend 160 billion riyals ($43 billion U.S.) during the year, London's Financial Times reported.

The budget estimated the year's revenues, virtually all from oil and petrochemical exports, at 155.6 billion riyals ($41.8 billion).

Riyadh economists were reported to have said the budget implies a price of $15/bbl for Saudi export crude and average production of 8 million b/d.

The Saudis' expected price contrasts with $13.20/bbl at close of trading Dec. 31 in London for February delivery of North Sea Brent blend crude. West Texas intermediate futures price last week stood at $14.67/bbl for February delivery.

Some local economists were said to believe recent low oil prices may result in a Saudi budget deficit of $15 billion.

Financial Times said Omani production reached a new average high last year at 800,000 b/d. State owned Petroleum Development Oman contributed 96% of the total.

PDO was reported to have cut production by 5% effective Jan. 2 in a bid to help shore up world oil prices.