The government is closing in on a multibillion pound investment deal with Saudi Arabia that would provide a backdrop to crucial talks on the Gulf state’s oil production.

Sky News understands that ministers have been working for weeks to finalise a new sovereign investment partnership (SIP) with Riyadh that would replicate a £10bn alliance unveiled with an Abu Dhabi state investment fund last year.

Sources said that talks about the SIP with Saudi Arabia were at an advanced stage, but that it was unclear whether details would be announced during a trip by Boris Johnson to the Middle East this week.

One insider said that Lord Grimstone, the former City grandee who is Mr Johnson’s investment minister, will accompany the PM on the trip to Saudi, raising the prospect that a deal would be formally announced this week.

If the alliance follows the model used in Abu Dhabi, it would utilise Saudi’s main sovereign wealth vehicle, the Public Investment Fund, which is now best-known in Britain as the owner of Newcastle United Football Club.

The SIP with Mubadala, which is jointly run by the government’s Office for Investment, earmarked billions of pounds for investment in sectors including technology, energy transition and life sciences.

Further details of PIF’s involvement in the Saudi SIP remained unclear on Tuesday afternoon.

In an emailed response to an enquiry from Sky News, a spokesperson for the Department for International Trade wrote: “No 10 will be setting out plans for the PM’s delegation later.”

Mr Johnson’s trip, during which he will seek to persuade Riyadh to increase oil production in order to alleviate market shocks after Russia’s invasion of Ukraine, comes amid international protests over a mass execution which took place in Saudi at the weekend.

The government has criticised the executions, paving the way for a potentially tense exchange of views when the PM arrives in Saudi Arabia on Wednesday.