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
Dubai and Abu Dhabi are taking leading roles as countries start to emerge from lockdowns
The second half of 2020 will be crucial for the global economy as countries begin to ...
READ MORE
A growing pipeline of GCC clean energy projects is a major opportunity for the region’s engineering, procurement and construction players
This article is the first in a series that captures key ...
READ MORE
After four difficult years, the outlook remains bleak for anyone hoping for a strong pick up in new project opportunities in the Middle East and North Africa
With some $4.7tn of ...
READ MORE
Sandeep Chouhan, executive vice-president and group head of operations and technology at Mashreq, explains how digital technology is transforming the way we bank
What is the impact of Big Data and ...
READ MORE
Early investment in telecoms network infrastructure puts the UAE in a strong position for successful digital transformation but a shift in mindset is required
The measures introduced in March 2020 to stop the spread of the Covid-19 virus forced workplaces and schools ...
READ MORE
Selected consultant will undertake study and assist in launching tests and full operation of the service
Consultancy firms are preparing to bid for the contract to undertake a feasibility study for ...
READ MORE
Abu Dhabi is pursuing more solar records with the launch of the procurement process for a planned 2GW solar project in Al-Dhafra
Days after commissioning the world’s largest single-site solar project, ...
READ MORE
Alongside existing strategic oil projects, the discovery of a giant offshore reserve at Khalij al-Bahrain has livened up Manama’s energy prospects
When Bahrain’s Oil Minister Sheikh Mohammed bin Khalifa al-Khalifa announced ...
READ MORE
Adnoc intends to transform itself into a global downstream major by investing $45bn to create an integrated refining and petrochemical complex in Ruwais
An astounding investment of $45bn has been announced by ...
READ MORE
Average value of disputes declines compared with 2018 but causes of contention persist
The value of construction disputes increased in the Middle East in 2019 even as the average time taken to ...
READ MORE
UAE leads as global economy restarts
A new era for EPC contractors
Four-year Mena projects market dip continues
MARKET TALK: The other side of the digital
CONNECT SERIES: Enabling future generations through digitalisation
EXCLUSIVE: Firms prepare Dubai flying taxi bids
Solar schemes no longer just vanity projects
Bahrain holds on to energy revival hopes
Abu Dhabi’s ambition to create the downstream Silicon
Regional construction dispute values drop
10 January, 2018 | .By RICHARD THOMPSON
