PARIS — Saudi Arabia is pouring $20 billion into a new investment fund run by Wall Street’s Blackstone Group. The French oil giant Total just inked a nine-billion-euro petrochemical deal with the kingdom. The British defense company BAE Systems is selling 48 Typhoon combat jets to Riyadh for an estimated five billion British pounds.
The world’s biggest companies might be talking about distancing themselves from Saudi Arabia amid a growing furor over the killing of the dissident journalist Jamal Khashoggi. But as American and European executives pull out of a showcase Saudi investment conference next week to avoid controversy, many companies are so deeply invested that they are unlikely to sever ties or avert future deals with the oil-rich kingdom.
Companies are still assessing the situation, which shifted rapidly as the kingdom announced on Friday that Mr. Khashoggi was dead and that it had arrested 18 Saudis in the case. But short of sanctions on Saudi Arabia, or a wholesale change in policy by the United States, Britain or other governments to curb political or commercial ties, big business won’t readily quit its relations with Riyadh.
“Saudi Arabia still has enormous wealth and powerful cachet,” said Bruce O. Riedel, a former C.I.A. analyst and an expert on Saudi Arabia at the Brookings Institution. “It will continue to be a crucial economic player, and it cannot be ignored. The question is whether business as usual will go on.”
Companies don’t always break out how much money they have reaped from Saudi connections. But a review of the kingdom’s broad spending on its military, infrastructure, oil, chemicals, technology and even entertainment underscores how Riyadh is simply too big a customer to ignore.
In the last decade, Saudi Arabia was awarded $138.9 billion in potential military contracts under the United States’ Foreign Military Sales rules, according to the Congressional Research Service. American companies including Lockheed Martin, Raytheon and Boeing, not to mention President Trump, are salivating over recent Saudi pledges to buy nearly $110 billion worth of arms in coming years. Much of that commitment has yet to be fulfilled.
Companies like BAE and Thales of France have also profited handsomely, as European defense companies exported €57 billion worth of armaments to Riyadh between 2001 and 2015, according to the Stockholm International Peace Research Institute.
And that’s just spending on weaponry. Saudi Arabia has also dished out billions in fees to American and European banks for advising on business deals. The kingdom bought around $20 billion worth of American products last year, including Ford autos and Boeing jets. Riyadh also sealed $15 billion in deals with General Electric for goods and services in areas like power generation, mining and health care. And the oil giants can’t possibly walk away from one of the world’s biggest producers.
American start-ups have benefited from the largess, as Saudi Arabia became their biggest source of capital last year. Saudi Arabia’s Public Investment Fund recently invested $1 billion in Lucid, a competitor to Elon Musk’s Tesla car company, and $3.5 billion in Uber.
The kingdom has been signing deals for futuristic buildings, AMC movie theaters and swank French hotels as part of a $500 billion blueprint for Neom, a modern city to rise from the desert by 2025. Riyadh is exploring nuclear energy deals to help power it all in anticipation of the day when the oil wells run dry.
Western banks have lined up for the chance to advise the Saudis. The kingdom has generated about $1.1 billion worth of fees for banks since 2010 in a variety of deals, including mergers and acquisitions and the arranging of loans and bonds, according to data from Dealogic.
The biggest quarry is Saudi Aramco, the world’s largest oil producer, as it prepares to list itself on public stock markets in anticipation of raising over $100 billion. The initial public offering has stalled, but two advisers to the offering, JPMorgan Chase and Morgan Stanley, are still working for Saudi Aramco in its negotiations to buy a majority stake in a Saudi chemical maker known as Sabic, according to people briefed on the matter.
Saudi Arabia has also showered billions of dollars on private equity firms so they can strike deals. The kingdom has pledged to provide up to $20 billion for a $40 billion infrastructure investment fund run by Blackstone, which had its first deal close this year.
While Stephen A. Schwarzman, Blackstone’s co-founder and chief executive, dropped out of the conference on Monday, the firm has no plans to sever ties with the kingdom.
“We have relationships with them, their institutions, over decades,” Jonathan D. Gray, Blackstone’s president, told analysts on an earnings call on Thursday. “We think of ourselves as long-term, responsible stewards of capital.”
Laurence D. Fink, the chief executive of BlackRock, went further, telling CNBC this week that while he was pulling out of the conference, his firm, the world’s largest asset manager, wouldn’t back away — even if the government ordered Mr. Khashoggi’s killing.
Some companies did not even try to distance themselves from the Saudis amid the Khashoggi furor. A spokeswoman for BAE said in a statement that it would send several senior executives to the Saudi conference.
Separating itself from the Saudis would be difficult for a defense contractor like BAE, which has 6,000 employees in the kingdom. The company counts on Saudi Arabia for at least 15 percent of its revenue, from both the sale of equipment like the Typhoon and the contracts to service them.
Such sales are built on the back of the British government’s relationship with the Saudi government, which has grown more critical for Britain as it prepares to leave the European Union. Prime Minister Theresa May unlocked the BAE deal when Prince Mohammed visited London in the spring, and she is angling to lure any eventual Saudi Aramco listing to the British stock exchange.
The situation is also critical for France, which has longstanding ties to Saudi Arabia and is the third-largest foreign investor after the United States and the United Arab Emirates. France sold €11 billion worth of arms to the kingdom in the last decade, and recently approved licenses for more sales potentially worth €14.7 billion. That doesn’t count €4 billion in French exports to the kingdom last year, and oil and chemical deals worth over €20 billion signed in the last two years.
After President Emmanuel Macron welcomed Prince Mohammed to the Élysée Palace in April with a kiss on the cheek, the countries created the Saudi-French Business Council. It is headed by Mohammed bin Laden, the founder of the Saudi Binladin Group and the father of Osama bin Laden, to explore more French investments.
Despite its flashy spending, Saudi Arabia needs foreign money more than ever. Foreign direct investment to the kingdom fell to a 14-year low of $1.7 billion last year, down from $7.4 billion in 2016 and $12 billion in 2012 because of fewer investments by multinationals, according to the United Nations. The economy only recently emerged from a recession in the first quarter of this year, a downturn that was brought on by low oil prices.
Prince Mohammed sought to counter some capital flight by arresting members of the royal Saudi family in November and holding them at the opulent Ritz-Carlton hotel in Riyadh — the same setting for the gathering next week. But the arrests have added to investors’ worries.
Even as the conference has caused consternation, companies still appear to be laying the groundwork for deals.
Though the chief executive of Thales, Patrice Caine, pulled out of the conference, the French company is sending a subordinate the Saudis would respect, and a spokesman, Cédric Leurquin, said Thales hadn’t changed its position on investing in Saudi Arabia. Although Mr. Leurquin would not divulge sales figures for Saudi Arabia, Thales has 700 employees in the kingdom, which it supplies with military hardware, missiles, electronic warfare systems and even high-tech security surveillance systems for Mecca and other holy sites.
A week after Mr. Khashoggi’s disappearance made headlines, Total, one of the world’s largest oil and chemical groups, announced a €9 billion joint venture with Saudi Aramco for a refining and petrochemical complex in Jubail. Total did not respond to requests for comment.
“This is a very serious topic where you cannot win,” Joe Kaeser, the chief executive of the German industrial giant Siemens, said this week as he tried to decide whether to attend the conference. The company received a blockbuster order last year for five gas turbines in Saudi Arabia, and has a gas turbine factory in its Eastern Province.
“If we skip communicating with countries where people are missing, I can just stay home,” Mr. Kaeser declared.