background picture

ARABIAN GULF BUSINESS INSIGHT

About the Publisher

-----

Contact Information

Email Address-----
Company Phone-----
Address-----

Socials

Facebook-----
Instagram-----
LinkedIn-----

Filters

200

articles found

View by
Gulf-China Relations Are Strictly Business
ARABIAN GULF BUSINESS INSIGHT
Gulf-China Relations Are Strictly BusinessHardly a day goes by without a story about China’s growing presence in the Gulf, which is a remarkable transition. When I started working on a PhD focusing on China-GCC relations in 2011, an economist at a regional sovereign wealth fund dismissed the project out of hand: “How are you going to write 100,000 words on selling cheap stuff and buying oil”? Nearly 15 years later the narrative has shifted hard in the other direction, with China generally considered a major external power in the region. That does not mean its role in the Gulf is any better understood.   Many project a maximalist view of China, anticipating a rising power that challenges American dominance worldwide. Perceptions of US policy drift in the Middle East contribute to this, leading to an assumption that China will come to play a major role in the Arab world. To understand what kind of actor Beijing will be here, however, you must have a clear understanding of what China wants in the region and how the Gulf features in China’s bigger picture.  First and foremost, the Gulf remains a place to get energy. For decades, China has had a voracious appetite for imported oil and gas and it will continue to be the world’s largest importer in the near term. Gulf countries typically provide it with between 40-50 percent of its crude oil imports and an increasingly large percentage of its LNG.   While Beijing has set 2030 as its target for peak hydrocarbon consumption, it will continue to rely on imported energy and petroleum products and Gulf producers will be important in meeting that demand. Less obvious is the money Chinese companies make in the Gulf. China’s position as a global trading superpower is well-established and it consistently ranks at or near the top of trade partners for every country in the region.   Beyond trade, the synergy between China’s Belt and Road Initiative (BRI) and Gulf ‘Vision’ development agendas has created tremendous opportunities for Chinese contractors. Since the BRI was announced in 2013, Chinese companies have signed $103 billion in infrastructure contracts in the GCC, with $17 billion in Iraq and another $12 billion in Iran. The Gulf is a very lucrative market for China, making it a major economic hub. Given this economic interdependence, it is tempting to project a greater political or security role for China – naturally, the thinking goes, Beijing will need to be more proactive in protecting the source of so much energy and revenue. For the short to near term, however, this logic is wrong. China has made it clear, time and again, that it is not willing to play the kind of security role that external powers have traditionally adopted here.   If you read China’s policy documents for the Middle East, you see a country that is pursuing economic interests. Its 2016 Arab Policy Paper, to date its only official Mena-centred white paper, largely focuses on hydrocarbons, trade and investment, infrastructure construction, and exporting technology in its own satellite, renewable and nuclear energy sectors. When it mentions security, it describes China in a supporting role; it is the job of regional actors to sort out the region. China is here for business. This is completely reasonable. The Middle East does not feature prominently in China’s foreign policy priorities. China shares land and maritime borders with 20 countries, many of which are weak, unstable or hostile. It has a tremendously challenging strategic environment and managing this requires most of the time, attention and resources of its foreign policy decision-makers. It also has to consider its competitive relationship with the US, which remains – despite perceptions – the most consequential extra-regional power in the Middle East. China does not have the same depth of experience, relationships, or expertise about the Gulf, and is not able to compete with Washington as a security or diplomatic actor.  In a recent conversation with a Chinese Gulf expert, I provocatively described China as a second-tier power here; his response was, “On a good day. We’re third-tier at best.” His hierarchy was the US, then the UK, France, Turkey and Russia all lumped together, and then China. I think he was right. That is not to say China is not important, but if we are going to accurately understand it as an actor in the Gulf, we have to start with the realisation that the region is not a top priority for Beijing.  As long as the energy continues to flow and the contracts continue to be signed, China will largely be satisfied. Expecting a major Chinese presence beyond the economic realm is wishful thinking. Jonathan Fulton is an associate professor of political science at Zayed University in Abu Dhabi and a nonresident senior fellow for Atlantic Council’s Middle East Programs and the Scowcroft Middle East Security Initiative
oil-gas
Feb 16, 2025
Adnoc Drilling Plans Further Acquisitions In Us And Europe
ARABIAN GULF BUSINESS INSIGHT
Adnoc Drilling Plans Further Acquisitions In Us And EuropeAdnoc Drilling is looking at more investment opportunities in the US, as President Donald Trump’s “Drill, baby, drill” mantra acts as a catalyst for increased shale oil and gas activity in the world’s biggest energy producer, a top executive told AGBI. The Abu Dhabi-listed company is planning to invest $1 billion this year, with around $700 million allocated for technology-related US and Europe acquisitions. The priority will be to strengthen its position in the global oilfield services with “at least two acquisitions,” Adnoc Drilling’s chief financial officer Yussef Salem said on Friday. “We are focusing on technologies related to the completion side after the well has been drilled,” Salem said. This will allow the execution of oilfield services from start to finish without third parties. Salem said the acquisitions are likely to be via Adnoc Drilling’s Enersol joint venture with Abu Dhabi holding company Alpha Dhabi. Salem has seen increased demand for Adnoc Drilling’s oil field services in the US. Two of the four companies Enersol acquired last year – Gordon and Deep Well Services – were US-based. “Both of these are now seeing increased activity levels on the back of this (new Trump policy),” Salem said. In the Gulf region Adnoc Drilling operates in Jordan and Saudi Arabia and plans to expand to Oman and Kuwait, including potential acquisitions of drilling assets for which it has allocated between $200 million and 300 million. “It’s all about the best way to land contracts in the most creative way,” said Salem. “Either we win contracts organically, and then we acquire standalone rigs and put them into operation, or we acquire local drilling assets or companies with contracts ready to operate.” While Kuwait plans to boost its production capacity to 4 million barrels per day, Oman needs to maintain its capacity – “hence, we focus on these countries,” Salem said. At the end of 2024 Adnoc Drilling had 142 owned rigs. By 2028, the company plans to expand its rig fleet to more than 150. Adnoc Drilling, which posted its financial results yesterday, is looking to refinance debt maturing later this year worth an overall $1.25 billion. Salem said the company will refinance a term loan worth $500 million and a revolving facility for $750 million, maturing in October 2025.
oil-gas
Feb 16, 2025
Oman Secures $100M Loan To Join Gcc Power Grid
ARABIAN GULF BUSINESS INSIGHT
Oman Secures $100M Loan To Join Gcc Power GridQatar Development Fund has signed a $100 million loan agreement with the Gulf Cooperation Council Interconnection Authority (GCCIA) to help finance the connection of the regional power grid to Oman. The project is expected to cost more than $700 million. It involves the construction of two 400 kilovolt (kV) overhead transmission lines connecting the GCCIA’s Al Sila station on the UAE-Saudi Arabia border to a new station at Ibri in Oman, which the GCCIA will build. The total length of the lines will be 530km. Two 400kV substations will also be built – one at Ibri and another at Al Baynunah in Abu Dhabi. The project is expected to begin in the second half of this year, with completion slated for H1 2027. The connection will unlock hundreds of megawatts of additional generation capacity and reduce the immediate need for a new power plant. GCCIA said the interconnected network will reduce operational expenditures for those connected, leading to “substantial annual financial savings” and a reduction of carbon emissions. “It will enable our networks to handle increasing loads and support future expansion, while also seamlessly integrating renewable energy sources like solar and wind power,” said Ahmed Al Ebrahim, CEO of the GCCIA. In addition to increasing the volume of energy exchange and trade among GCC nations, he said there was also an opportunity for electricity trade with Iraq. The current GCCIA network connects Kuwait, Saudi Arabia, Bahrain, Qatar and the UAE. The interconnection network prevented more than 2,800 electrical outages in the Gulf through the instantaneous transmission of required power, the GCCIA said. There is also a plan to increase electricity transmission capacity in the UAE by expanding lines from Saudi and installing a new substation for $205.5 million. The project is expected to be finished by 2027, according to the GCCIA’s website.
oil-gas
Feb 14, 2025
Trans-Sahara Gas Pipeline Project Back On The Table
ARABIAN GULF BUSINESS INSIGHT
Trans-Sahara Gas Pipeline Project Back On The TableA multi-billion dollar trans-Sahara gas pipeline project dating back more than half a century has been revived after a meeting between the oil ministers of Algeria, Nigeria and Niger. The ministers held talks in the Algerian capital, Algiers, on Tuesday to discuss the resurrection of the Trans-Sahara Gas Pipeline. This involves the construction of a 4,100km pipeline linking Nigeria’s gas fields with those in Algeria. From there, gas could be piped to gas-thirsty European countries, which are trying to wean themselves off a long reliance on Russian gas supplies. Mohamed Arkab, oil minister of Algeria, Ekperikpe Ekpo, oil minister of Nigeria and Sahabi Oumarou, oil minister of Niger, issued a statement at the end of their one-day talks renewing a commitment to the project and pledging to pursue the plan, according to the Algerian news agency. “We have agreed to pursue our meetings in order to revive this project. We will not back off the project,” Ekpo said,according to Djazairess newspaper on Wednesday. Tuesday’s talks were the latest in a series of meetings held by the three ministers in an attempt to jolt the project out of hibernation. The pipeline would start in Warri, Nigeria, and end almost 2,600 miles later in Hassi R’Mel, Algeria, where it would connect to existing pipelines that run to Europe. The idea of a trans-Sahara gas pipeline was first proposed in the 1970s.  A study by Penspen, a project management company, in 2006 found the pipeline to be technically and economically feasible. Algerian officials have estimated the cost of the project at around $13 billion and said it could send up to 30 billion cubic metres a year of gas to Europe. Algeria exported 54 billion cubic metres of gas in 2021, mainly to Italy and Spain.
oil-gas
Feb 13, 2025
Iraq-Turkmenistan Gas Deal Unlikely To Happen
ARABIAN GULF BUSINESS INSIGHT
Iraq-Turkmenistan Gas Deal Unlikely To HappenA gas supply agreement signed by Iraq and Turkmenistan in 2023 may never begin because of challenges with transiting the gas through neighbouring Iran, Iraqi analysts say. The deal was for nearly 20 million cubic metres of natural gas per day to supply Iraq’s power facilities, but Iraq and Turkmenistan do not share a border. “Given Iran’s history of problems, including risks, international sanctions and pressures on Iraq, I believe this gas route to Iraq is not practical,” said Walid Khaddouri, a prominent Iraqi energy analyst and a former director at the Kuwaiti-based Arab Energy Organization. This means that Iraq, Opec’s second-largest oil producer after Saudi Arabia, may once again turn to Qatar for its gas needs. This option would be costly because of a need to build liquefied natural gas (LNG) facilities in Iraq, the analysts say. “Iraq would be better to look inward for its gas needs because it is awash with gas. There are big gas reserves, which need to be exploited and which can provide Iraq with all its needs,” Khaddouri told AGBI.  Iraqi Prime Minister Mohammed Al-Sudani said last week that the country plans to stop importing Iranian gas by 2028 due to persistent disruptions in supply. As a result, Iraq’s power generation capacity plunged in December, according to officials. Iraq’s Electricity Ministry had said late last year that it still needs to devise payment plans for the proposed Turkmen gas. “Getting gas from Turkmenistan requires finalising a contract with an intermediary company to ensure such supplies are delivered and not interrupted. I don’t think it is easy to find that company since Iran is under sanctions,” said Nabil Al-Marosoumi, economics professor at Iraq’s Basra University. “There also must be payment arrangements, which require at least eight months to be finalised.” Even if a final deal went ahead, 20 million cubic metres per day of Turkmen gas would generate no more than 4,000 megawatts of electricity, not enough to meet Iraq’s power needs, Marsoumi said. More realistic options would be to buy Qatari LNG, and develop local gas field deposits and solar power capacity, Marsoumi said. France’s TotalEnergies, Acwa Power of Saudi Arabia and Abu Dhabi-based Masdar Company, for instance, have been awarded solar power projects. Iraqi government officials said this week that Iraq is pushing ahead with a project to build LNG-import facilities in the southern oil hub of Basra, an indication that Baghdad may be reviving this three-year-old concept. Experts say that Iraq can probably afford to halt Iranian gas imports as local projects awarded to international companies bring more domestic gas to market. Iraq’s gas reserves remain largely untapped because of underinvestment, conflict and sanctions.
oil-gas
Feb 13, 2025
Oman Advances Liquefied Hydrogen Export Project
ARABIAN GULF BUSINESS INSIGHT
Oman Advances Liquefied Hydrogen Export ProjectWhile countries in the Gulf have big ambitions for hydrogen projects, they are still trying to work out how to export it. Oman, however, is advancing plans to establish what it says is the world’s first commercial scale liquid hydrogen “corridor” to export to Europe green hydrogen produced domestically. Usually, producers think about transforming it to ammonia or delivering it through pipelines, but carrying it on vessels like liquefied natural gas (LNG) is more challenging because of technical constraints. The volatile gas needs to be refrigerated to -253C. “We, as Oman, are going to be one of the top producers of green hydrogen by 2030,” Rumaitha Al Busaidi, Hydrom’s business development manager, told the World Hydrogen Mena Congress in Dubai. “We think liquid hydrogen can work, it is feasible.”  Developed by Oman’s state-run hydrogen company Hydrom, the Ministry of Energy, Athens-based Ecolog and offtaker EnBW, one of Germany’s largest power companies, the project is expected to be completed in 2030. It follows an agreement signed during Cop28 in Dubai in 2023 between Oman, the Port of Amsterdam, Zenith Energy Terminals and GasLog, outlining the development of a liquid hydrogen supply chain to transport green hydrogen from Oman to the Netherlands and elsewhere in Europe. Hydrogen has multiple creative uses including to make fuel, fertilisers and artificial sweeteners. The Omani government has committed to build a facility in Duqm on Oman’s Arabian Sea coast to liquefy the gas. From there, Ecolog vessels – each able to carry 2,000 tonnes of hydrogen – would then deliver the gas to Amsterdam’s hydrogen terminal, the world’s largest. The fuel would then be re-gasified and distributed through a pipeline to Germany or moved in its liquefied form by trucks in the Netherlands. An investment decision is expected in the first half of next year, and the first commercial shipment in 2029 or 2030, Ellen Ruhotas, Ecolog’s head of hydrogen midstream, told AGBI on the sidelines of the conference. The first phase, which consists of liquefying 50,000 tonnes of hydrogen per year, will then be scaled up later to as much as 200,000 tonnes per year, said Ruhotas. The liquefaction of hydrogen needs a lot of electricity, according to industry experts. Yet the technology used in Oman would reduce the required amount, making the liquefied hydrogen cheaper than ammonia. “People picked ammonia because there are ammonia ships today,” said Ruhotas. “But ammonia is toxic, difficult to handle and needs a lot of engineering controls.” Ruhotas said that liquefied hydrogen will take the same path as LNG. “LNG started with one country and a long-term charter agreement ownership. The same thing will happen with hydrogen,” she said. “After Europe, we plan to ship to Asia.” GasLog, the main shareholder of Ecolog, owns and operates nearly 40 LNG vessels.  “We need to have the hydrogen producers moving as well, and that’s not happening as quickly as we would like,” she said. “I keep screaming at them. I say, I’m ready, where are you? The off-takers also say they are ready.” The hydrogen rainbow
oil-gas
Feb 13, 2025
Opec Sticks To Growth Forecasts Despite Trump Policies
ARABIAN GULF BUSINESS INSIGHT
Opec Sticks To Growth Forecasts Despite Trump PoliciesOpec on Wednesday stuck to its forecast for relatively strong growth in global oil demand in 2025, saying air and road travel would support consumption and potential trade tariffs were not expected to impact economic growth. The Organization of the Petroleum Exporting Countries, in a monthly report, said world oil demand will rise by 1.45 million barrels per day (bpd) in 2025 and by 1.43 million bpd in 2026. Both forecasts were unchanged from last month. Opec’s view on oil demand is at the higher end of industry forecasts and it expects oil use to keep rising in coming years, unlike the International Energy Agency (IEA) which see demand peaking this decade as the world switches to cleaner fuels. In the report, Opec said the trade policy of president Donald Trump’s new US administration has added more uncertainty into markets, potentially creating supply-demand imbalances that are not reflective of market fundamentals, but it made no change to its 2025 economic growth forecast. “It remains to be seen how and to what extent potential tariffs and other policy measures will play out,” Opec said in the report. “So far, they are not anticipated to materially impact the current underlying growth assumptions.” Oil was steady after the Opec report was released with Brent crude trading lower towards $76 a barrel. The IEA sees 2025 demand growth at 1.05 million bpd, lower than Opec, although the gap between the two on 2025 is much smaller than it was for 2024 when the split reached a record high driven by differences over the pace of the energy transition. Opec+, which groups Opec and allies such as Russia, has implemented a series of output cuts since late 2022 to support the market. Its current plan calls for oil output to be gradually increased from April.
oil-gas
Feb 13, 2025
Taqa’S Capex Rises 60% Amid New Projects
ARABIAN GULF BUSINESS INSIGHT
Taqa’S Capex Rises 60% Amid New ProjectsCapital expenditure of Abu Dhabi National Energy Company (Taqa) rose by nearly two-thirds to more than AED9 billion ($2.5 billion) in 2024 due to the construction of new projects in the UAE. The spend was primarily focused on the Mirfa 2 and Shuweihat 4 reverse osmosis desalination projects, the company said in a filing to the Abu Dhabi Securities Exchange (ADX) on Thursday. Net income reached AED7 billion in 2024, up 1.5 percent compared to the prior year, excluding one-off items of AED11 billion related to the acquisition of a 5 percent stake in Adnoc Gas and an AED1 billion deferred tax charge due to the introduction of UAE corporate tax.   With total assets estimated at around AED200 billion ($54 billion) Taqa is the third largest listed company in the UAE and is one of the top 10 utilities companies in Europe, the Middle East and Africa. The company currently operates in 11 countries across four continents. Revenues increased 6.7 percent annually to AED55.2 billion, driven by sustained growth in transmission & distribution and the consolidation of Taqa Water Solutions, which was acquired for AED1.7 billion in September 2024. The company’s board has proposed a final cash dividend of 2.1 fils per share, bringing the 2024 dividend to 4.2 fils per share. “Taqa remains focused on delivering its 2030 strategy by investing in critical infrastructure and expanding internationally,” said CEO Jasim Husain Thabet.
oil-gas
Feb 13, 2025
Marine Fuel Sales In Fujairah Revive On Red Sea Diversions
ARABIAN GULF BUSINESS INSIGHT
Marine Fuel Sales In Fujairah Revive On Red Sea DiversionsGlobal marine fuel sales jumped in 2024 after attacks by Yemen’s Houthis starting in late 2023 prompted most shipping companies to divert vessels around southern Africa rather than through the Red Sea, according to data and analysts. Singapore bunker volumes logged fresh highs of 54.92 million metric tonnes in 2024, or about 955,000 barrels per day (bpd), while sales at the United Arab Emirates’ Fujairah posted the first annual uptick after a downtrend for several years. Rotterdam marine fuel sales, also called bunker fuel, rose 12 percent in the first quarter of 2024 to 2.16 million tonnes, or about 38,000 bpd from the previous three months, according to Rotterdam port authority data, and held above that level for the rest of 2024. “Diversions have indeed increased tonne mileage due to longer routes which has boosted demand for fuels in ships,” said Aldo Spanjer of BNP Paribas. In January, the Houthis announced they would only attack Israeli-linked ships following the ceasefire in Gaza, heightening hopes of a return to the Red Sea and Suez Canal. The return of northbound transits through the Suez Canal would reduce bunker fuel demand, said BNP Paribas’ Spanjer and FGE analyst Stephen Brennock, but shipping executives remain cautious over returning to navigation through the Red Sea route to the Suez Canal. The rebound in Rotterdam marine fuel sales in the first quarter was mostly owing to firm demand for high sulphur fuel oil from larger vessels, analysts said. Overall Rotterdam bunker sales fell by 1 percent in 2024 year-on-year to 9.06 million tons, or 158,000 bpd, weighed down by weaker demand for very low sulphur fuel oil.
oil-gas
Feb 13, 2025
Adnoc Drilling Proposes Higher Dividend After Profit Growth
ARABIAN GULF BUSINESS INSIGHT
Adnoc Drilling Proposes Higher Dividend After Profit GrowthThe board of directors of Adnoc Drilling has recommended raising the 2024 cash dividend by 10 percent year on year to $788 million after revenues rose 32 percent to $4.03 billion last year. The payout is subject to shareholders’ approval, and if approved, Adnoc Drilling’s dividend will amount to 18.1 fils per share (100 fils = 1 AED). The dividend will then increase to at least $867 million for 2025 based on the minimum 10 percent year-on-year increase, the company said in a statement. Adnoc Drilling’s EBITDA rose 36 percent to $2.01 billion in 2024, yielding a 50 percent EBITDA margin. Its net profit grew by 26 percent year on year to $1.3 billion. At the end of the fourth quarter of 2024, the fleet consisted of 142 owned rigs. In 2024 the company made 23 rigs operational, including two jack-up rigs set to join in the first half of 2025. By 2028, Adnoc Drilling plans to expand its fleet to more than 150 rigs. In the medium term, Adnoc Drilling expects revenue to grow to $5 billion in 2026. It established its maintenance capital expenditure between $200 and $250 million annually. A subsidiary of Abu Dhabi National Oil Company, Adnoc Drilling’s share price has risen 8 percent this year and by 156 percent since it listed on the Abu Dhabi stock exchange in October 2021.
oil-gas
Feb 13, 2025
Nmdc Group To Pay $191M Dividend As Revenue Rises
ARABIAN GULF BUSINESS INSIGHT
Nmdc Group To Pay $191M Dividend As Revenue RisesThe board of Abu Dhabi’s NMDC Group has recommended paying a cash dividend of AED701 million ($191 million) after revenues surged 57 percent year on year to AED 26 billion in 2024, according to UAE state-owned Wam news agency. The payout is subject to shareholders’ approval. If approved, the group’s dividend yield will reach 13 percent, while the dividend payout ratio will stand at 91 percent. Last year, the company, previously known as National Marine Dredging Company, listed 23 percent of NMDC Energy, an engineering subsidiary, generating nearly AED3 billion. AED2 billion was paid back to shareholders through a special interim dividend. Net profit at NMDC Group climbed 44 percent year on year to AED3 billion last year, underpinned by expansions into East and Southeast Asia and the award of a large-scale contract for a subsea pipeline in Taiwan, according to Wam. Shares of the company, which trades on the Abu Dhabi Securities Exchange, closed at AED24.28 on Tuesday. They are down nearly 18 percent in the past year. The company’s fourth-quarter net profit rose 43 percent year on year to AED916 million. The top line increased 37 percent annually to AED8 billion. Yasser Zaghloul, CEO of NMDC Group, said the company will explore diversification strategies to drive growth without giving more details. NMDC Group is backed by Alpha Dhabi Holding, the investment subsidiary of Abu Dhabi-headquartered  International Holding Company. This month Ahmed Al Dhaheri, NMDC Energy’s CEO, told AGBI that the company was looking at expanding its renewable energy business in South East Asia and Europe.
oil-gas
Feb 12, 2025
Kuwait Plans New Power Projects To Avert Supply Gap
ARABIAN GULF BUSINESS INSIGHT
Kuwait Plans New Power Projects To Avert Supply GapKuwait is planning a series of new power projects to avert an electricity supply crisis during the hot summer months when demand peaks, the Opec member’s minister of electricity, water and renewable energy has said. Minister Mahmoud Abdulaziz Mahmoud Bushehri, quoted by the Kuwaiti daily Alseyassah on Tuesday, said power consumption next summer will surpass the Gulf emirate’s generation capacity but a shortfall of around 1,000 megawatts will be offset through the Gulf power network, which groups Kuwait with five other regional states. Bushehri said supplies from the Gulf grid will allow Kuwait to avert electricity shortages next summer, when demand exceeds 19,000 MW. “To tackle the supply problem, we have devised plans to expand existing power plants and construct a number of new facilities. The operational life of some stations has expired and they need to be taken out of service. This means we need to build new stations to replace those units,” the minister said. Kuwait is consistently among the hottest countries in the world, particularly during the summer months when temperatures can rise to as high as 54C, and air conditioning units are in high demand. Despite strong oil production and large reserves, the country’s power outages have been exacerbated by limited investment because of political deadlock, according to energy experts. Bushehri said Kuwait’s total electricity production will reach around 20,000 MW in three years when a range of projects are completed. These new projects include renewable energy schemes that will allow Kuwait to attain a target of expanding the share of renewable sources to 30 percent of the energy mix within the next four years.
oil-gas
Feb 12, 2025