Opec strategy pays off
10 January, 2018 | By RICHARD THOMPSON
A series of events in the final weeks of 2017 provide a strong indication of what we can expect in the year ahead.
From an economic perspective, the most significant was the 30 November agreement between Opec and non-Opec oil producers to extend the oil production cap to the end of 2018. The move aims to rebalance global oil supply and demand, and remove damaging volatility in the energy markets.
The strategy is working. Oil prices are climbing and the improved outlook gives a degree of fiscal flexibility that will help governments to push ahead with difficult economic reforms.
An initial public offering (IPO) of shares in the fuel distribution arm of Abu Dhabi National Oil Company in December was the first of several listings planned in the region. This will be followed in 2018 by the Saudi Aramco IPO, which could be the biggest share sale in history. These sales pave the way for the more challenging privatisation of the region’s utilities and other state entities.
There is huge investor appetite to buy into the region’s prime assets, and as well as delivering substantial windfalls to governments, the privatisations will have a transformational effect on the region.
Set against this is rising political risk. The ongoing Qatar crisis, the anti-corruption arrests in Saudi Arabia and the missiles fired at the GCC from Yemen, all in December, could undermine investor confidence.
The coming year will continue to deliver shocks. But companies must not lose sight of the powerful, long-term fundamentals driving the region – a fast-growing, young population, an expanding middle class, ambitious and well-funded diversification programmes, and the world’s most abundant energy supplies.
Related Posts
Mashreq, one of the leading financial institutions in the UAE, today has reported its financial results for the first quarter ending 31st March 2018.
Key highlights [1Q 2018 vs 1Q 2017]:
...
READ MORE
While the Covid-19 crisis and drop in oil prices have led to a collapse in government revenue and short-term project spending, regional project plans remain in place
The combination of the ...
READ MORE
A consultant will be appointed to carry out study on border fields
Kuwait and Iraq are planning to appoint consultants to study the development of shared oil fields, Kuwait’s Oil Minister ...
READ MORE
An improvement in non-hydrocarbon GDP growth is benefiting the sultanate’s construction sector, with $2.4bn of contract awards so far this year and more expected in 2020
Oman’s construction market has endured ...
READ MORE
The timing of peak oil demand will be significant for oil producers in the Mena region as it will require stakeholders to transform their operations
The world currently consumes about 99 ...
READ MORE
Regional cities could target the games as a driver for future economic growth
Two upcoming global events have underpinned economic growth in the region for most of the past decade.
Expo 2020 ...
READ MORE
Increased capital spending has led to an uptick in contract awards in the first quarter of 2019
Saudi Arabia’s projects market is showing signs of recovery as government figures and data ...
READ MORE
The inaugural MEED-Mashreq Business Leaders Forum served as a platform to discuss the impact of ESG principles on modern supply chains
Download the report
Actionable change is no longer limited to a ...
READ MORE
The state-backed Abu Dhabi Company for Onshore Petroleum Operations (Adco) is ready to sign the contract for the Bab Integrated Facilities Project Expansion, one of the largest planned oil and ...
READ MORE
Over the next three years an estimated $40bn worth of construction contracts will be awarded each year in the UAE as the country delivers its $800bn pipeline of major projects ...
READ MORE
Mashreq posts a 9.5% increase in Net Profit
Project opportunities to watch out for
Kuwait and Iraq to study developing shared oil
Oman construction shows signs of recovery
Energy industry prepares to tackle life after peak
GCC attentions turn to the 2032 Olympics
Saudi projects market shows signs of recovery in
Report: The ESG Impact on Modern Supply Chains
Adco ready to sign Bab expansion contract
The UAE’s Construction Opportunity
10 January, 2018 | .By RICHARD THOMPSON
