On the sideline of the G20 summit held on 28-29 June 2019 in the city of Osaka, Japan, the Crown Prince of Saudi Arabia, Mohammed bin Salman held a series of talks with Russian President Vladimir Putin. The two countries discussed bilateral relations, most notably in trade and investment. One of the outcomes of the talks was the announcement that both governments are planning to create a business council that will facilitate cooperation between big enterprises of the two countries. According to Russian Direct Investment Fund (RDIF) (the Russian sovereign wealth fund) CEO Kirill Dmitriev, “The two governments have planned to create an economic council between Russia and Saudi Arabia, which will unite the most influential businessmen from the Russian and the Saudi side to implement major joint projects.”

The RDIF was created in 2011 with $10 billion in start-up capital. Initially a subsidiary of state-owned development bank Vnesheconombank, the RDIF was established to attract foreign capital to the Russian economy by collaborating with overseas investors on co-investments. The RDIF has signed a series of long-term strategic partnerships and joint ventures with foreign government institutions, including a partnership agreement with the Saudi Arabian Public Investment Fund (PIF) (Saudi sovereign fund) to jointly invest in projects in Russia with an emphasis on infrastructure, agriculture and technology. According to press reports, PIF’s share of the investment will amount to US$10 billion, part of which has already been invested. It is reported that Saudi Arabia, jointly with the RDIF, has invested US$3.9 billion so far in Russia.

The economic cooperation between the two countries reportedly includes the establishment by the RDIF, Saudi Aramco and the Saudi Arabian General Investment Authority of a US$1 billion joint investment platform to invest in the energy sector. It is also reported that Russia’s state energy firm Novatek is courting Saudi Aramco to invest in its Arctic liquefied natural gas project, and that the RDIF, PIF and Saudi Aramco are holding talks on Saudi Aramco’s purchase of a stake in Russian tech holding company Rusnano.

Saudi Aramco and the RDIF have agreed on the main terms of investment in Novomet Group, one of Russia’s largest developers and producers of submersible equipment for the oil industry.

According to reports, Russian President Vladimir Putin is set to visit Saudi Arabia in October this year. It is intended to pave the way for further strategic and economic cooperation between the two countries.