Saudi Arabia and Spain do not share major international forums beyond the G-20 and the United Nations, and on top of that, the Arab country has just aligned itself with Russia and China in the Brics group. Despite this, "relations are good" and "there is no problem in foreign policy", according to Spanish Government sources. The interests between the two countries have more to do with business than politics.
Among the Spanish companies consulted, there is an interest in maintaining the climate for developing projects in Saudi Arabia. That is why they are carefully observing a possible change in relations between the two countries caused by Saudi Telecom's secret plan to obtain 9.9% of Telefónica for 2.1 billion euros. The companies recognize that it has been easy for them so far to do business with a country that swims in abundance and some believe that the most likely thing is that the Spanish Government will allow the entry of Saudi capital with conditions.
Aside from a possible veto by the Executive, Telefónica's bylaws already limit the exercise of any shareholder's voting power to 10%.
They also include an article, article 33, which allows the entry of Saudi Telecom into the council, despite the fact that it is a competitor. This article prevents a rival company from participating in the management body, unless it has "established a strategic alliance". This is the case of Saudi Telecom, which reached an agreement of this type with Telefónica in February.
Government sources explain that neither the first vice-president, Nadia Calviño, nor the Minister of Foreign Affairs, José Manuel Albares, maintained contact with the Saudi delegation at the G-20 summit this weekend in India. The Saudi Telecom file has been taken over by Defense and Economy, without touching the diplomatic route for the time being.
The interests of the two countries converge in business, especially through Navantia, Indra, Iberdrola, Técnicas Reunidas (TR) or those of the AVE consortium in Mecca, including Renfe, Adif and Talgo.
An investment manager who in 2012 worked at a global firm in London recalls that that year the Saudi sovereign fund, PIF, owner of 62% of Saudi Telecom, was a large buyer of Spanish debt. At that time, the PIF mandate was very conservative and focused on fixed income. Now Saudi Arabia's Vision 2030 aspires to the diversification of a country addicted to oil.
Navantia sources explain that talks with Saudi Arabia to secure a new contract for five ships in the country continue. This order may exceed the 1,800 million to build five corvettes in Cadiz, of which three have already been delivered. It remains to be seen whether a change in relations between the two countries can affect the contract.
Renfe, Adif, Talgo and the rest of the companies of the Ave a la Mecca consortium, awarded in 2011, will operate from 2021 an infrastructure of which they will be concessionaires for 12 years. The investment exceeds 7.1 billion euros and, according to consortium sources, the operation is carried out without disagreements between the parties. One of the major contractors of the oil giant Saudi Aramco is Técnicas Reunidas, which has contracts in the country worth more than 12.3 billion dollars since 2012. Saudi Aramco is "one of the most important customers" of the company, they say from the company Iberdrola will build a large self-consumption plant there.
What needs to be seen now are the intentions of Telefónica de Saudi Telecom, which continues to not notify the Government of the operation.
