Oil producers plan $ 740 bn investment in energy projects

Updated 07 October 2012
0

Oil producers plan $ 740 bn investment in energy projects

JEDDAH: Oil producers in the Middle East and North Africa plan to invest $ 740 billion in energy projects in the next five years, led by the Kingdom, according to Arab Petroleum Investments Corp.
Saudi Arabia tops the list with committed investments of $ 165 billion, mostly generated by Saudi Aramco and Saudi Basic Industries Corp. (SABIC), followed by the UAE that plans to invest $ 107 billion in the period, added the report from Apicorp Research.
Algeria overtook Qatar and Iran as the third-biggest investor, with $ 71 billion of potential spending, largely the result of catch-up investment.
Iran's energy spending program has been put at $ 68 billion, said the report.
Despite moving up the rankings ahead of Qatar and Kuwait, Iraq with $ 56 billion worth of capital requirements is still far below its huge potential.
The report said MENA energy capital investment is expected to add up to $ 740 billion for the five-year period 2013-17. Compared to past assessments, which have been uniformly and consistently revised to reflect the full scale and scope of the power sector, investment appears overall on the rise again, driven mainly by costs and a catch-up effect, the report said.
It said investment has been affected to different degrees in countries still facing political and economic uncertainties and/or a precarious environment. This is the case in Egypt, Libya and to a larger extent Yemen.
Notwithstanding sustained expansion of investment, power supply has fallen short of needs. To catch up with unmet potential demand, medium-term capacity growth, which has been worked out on a country by country basis, is expected to be much higher than that of economic output: 7.8 percent for the period 2013-17 against 4.5 percent for GDP.
According to the APICORP report, the cost of an "average energy project," which has risen almost three times between 2003 and 2008, has resumed its upward trend after somewhat stabilizing in the middle of the global financial crisis. However, the relatively moderate 7 percent upward trend underpinning the current review should not mislead. The extent to which project costs are predictable depends on the outlook for the price of engineering, procurement and construction (EPC), and its components.
In a context of widespread deleveraging, the financing of energy projects is expected to be structured with less debt. On one hand, the upstream, midstream and T&D systems in the power sector will continue depending heavily on internal funding in the form of either corporate retained earnings or state budget allocations. On the other, the hydrocarbon downstream, which has traditionally relied on debt, typically in a proportion of 70 percent, will need more equity.
In addition to the deteriorating investment climate, three issues continue to confront investors - rising costs, scarcity of natural gas supply and funding limitations.
Countries in the region can finance projects on their own as long as the basket of OPEC crudes stays at more than $ 100 a barrel, the report said.


New designer’s ranges help lift sales at Burberry

A window of a Burberry store in central London, UK. The brand said new products accounted for about half the wares in its shops by the end of June. (Reuters)
Updated 17 July 2019
0

New designer’s ranges help lift sales at Burberry

  • Fashion label more than a year into an overhaul to take it more upmarket

LONDON: British luxury brand Burberry reported a pick-up in first quarter sales after it began shifting more new designs by creative chief Riccardo Tisci into its stores as part of a turnaround plan.

The fashion label is more than a year into a high stakes overhaul by CEO Marco Gobbetti aimed at taking Burberry more upmarket  and reviving its image, including with edgier takes by Tisci on some of its classic products such as the trench coat.
The brand said new products had accounted for around half the wares on offer in its shops by the end of June, more than some analysts had expected.
This helped to lift same store sales by 4 percent — following lacklustre growth of 1 percent in the previous three months and topping market expectations of around 2 percent — and its gamble on a new designer appeared to be paying off for now.
“The consumer response was very promising, delivering strong growth in our new collections,” Gobbetti said in a statement.
Burberry has in recent quarters lagged the performance of luxury industry leaders like LVMH’s Louis Vuitton or Kering’s Gucci, which benefited from thriving demand in China in spite of US trade tensions.

FASTFACT

Thomas Burberry was just 21 years old when he established the company of the same name in 1856.

Those firms are due to post sales for the April to June quarter next week.
The pace of Burberry’s revenue growth within China and more broadly across Asia also improved slightly, despite slowing Chinese economic growth.
Its revamp has included rolling out a new logo-style print, or monogram, it hopes will catch on as it works on extending its reach in high-margin handbags; and it is redesigning stores as well as making a big marketing push with social media campaigns.
The company maintained its forecast for broadly stable revenue and operating margin at constant exchange rates for the 2020 financial year. Revenue and operating profit are not expected to pick up in a more meaningful way until 2021.