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.

Oman plans LNG capacity expansion

Plans include expanding the liquefaction capacity of the Qalhat plant Oman plans to extend the lifespan of its liquefied natural gas (LNG) facilities and raise production capacity by 10 per cent ...

Oversupply continues to challenge Dubai office market

Supply and demand imbalance is resulting in less office space being built and property owners offering tenants generous incentives Dubai’s office market continues to be oversupplied, resulting in less office space ...

UAE logistics eyes future opportunities

Opportunities in the UAE logistics market emerge on the back of evolving freight solutions and bilateral ties Logistics players in the UAE are setting their sights on strategic avenues of growth ...

Besix opens 3D concrete printing studio in Dubai

Besix 3D is already working on a variety of projects for government and private companies Belgian contractor Besix has opened a 3D concrete printing studio in Dubai to help develop the ...

The road ahead for UAE manufacturing

Manufacturing and industrial growth are quickly emerging as flagbearers for the UAE’s long-term economic diversification ambitions Enabling a flourishing local industrial and manufacturing economy has long been a strategic priority for ...

A disappointing year for growth in the UAE

The UAE is seeing muted growth in 2017, estimated at less than 1.5 per cent, as low oil prices and production cuts weigh on the economy. The non-hydrocarbons sector is faring ...

Covid-19 impact on insurance markets

Insurers are seeing and can expect a trickle down effect of higher claims and falling new revenue streams from the global slowdown Click here to download MEED’s Covid-19 insurance sector analysis Covid-19 ...

Innovation, ESG to spur Islamic finance growth

Growth recorded over recent years generates optimism for Islamic finance, but arguably, more needs to be done for the industry to maintain its upward trajectory going forward One of the most ...

Organ Transplant in the GCC; A Snapshot

Organ transplant is a procedure in which an organ or part of it is removed from a donor’s body and transplanted/implanted into a recipient. It is done to replace a ...

Abu Dhabi real estate pivots to green

Environmental, social and governance (ESG) principles can become a way for Abu Dhabi real estate to differentiate its offerings at a global scale This article is the second in a series ...