UAE sees only ‘moderate’ rise in shale output
UAE sees only ‘moderate’ rise in shale output
Suhail Al-Mazrouei, the Emirates’ minster for energy, told an audience at the Bloomberg Invest Abu Dhabi event in the UAE capital that he had been “positively surprised” that growth in US shale output has been relatively low this year, despite the crude oil price hitting the $60 per barrel amount most experts regard as the economic level for profitable shale production.
“Growth in shale has not been as fast as expected, and I think it will also be moderate next year. I think the shale producers have in the past concentrated on the ‘sweet spots’ — reservoirs where it’s cheap and easy to get oil. But the new reservoirs are not as easy, and the costs are higher,” he said.
“So while I think shale oil production will increase, I don’t think it will rise enough to offset the production limits agreed under the OPEC deal, combined with the increase in global demand for oil. We were surprised by the growth in demand in 2017, and I think next year will also be healthy,” he added.
Al-Mazrouei said that Abu Dhabi had invested 400 billion dirhams ($109 billion) in its oil industry, making it one of the most efficient in the world. “I’m sometimes asked if we can compete against the low-cost producers, but we are one of the lowest-cost producers and that will continue.”
He said that at the recent OPEC meeting in Vienna, “a group of responsible nations came up with a production cut to manage the glut of oil and reduce inventories. OPEC will continue to be a responsible market balancer for oil supplies.”
Waleed Al-Muhairi, who is chief executive of alternative investments for the Mubadala Investment Company, told the gathering that it had invested in 16 technology firms as part of its $15 billion investment in the SoftBank Vision Fund, in which Saudi Arabia’s Public Investment Fund is also a leading investor. He said the investments had been in the sectors of artificial intelligence, robotics, and agricultural technology, including what he described as “vertical farming,” a high-tech form of agriculture that he said was more efficient than farming “in the ground.”
Mubadala is to open an office in San Francisco to be near to investment prospects in America’s technology heartland.
Mohamed Jameel Al-Ramahi, chief executive of the Masdar alternative energy business, said that he was considering big investments in Saudi Arabia, including in the solar panel business.
“It’s clear that Saudi Arabia, as the biggest economy in the region, is a very important market and they are committed to renewables. We are also committed to that market,” he said.
IMF urges Lebanon to make ‘immediate and substantial’ fiscal adjustment
- Lebanon’s debt to GDP ratio is the third largest in the world
- Donor states and institutions are looking to Lebanon to implement the reforms in order to release billions of dollars worth of financing pledged at a conference in Paris in April
BEIRUT: Lebanon requires “an immediate and substantial” fiscal adjustment to improve the sustainability of public debt that stood at more than 150 percent of gross domestic product (GDP) at the end of 2017, the IMF executive board said.
An IMF statement released overnight said IMF executive directors agreed with the thrust of a staff appraisal which in February urged Lebanon to immediately anchor its fiscal policy in a consolidation plan that stabilizes debt as a share of GDP and then puts it on a clear downward path.
Lebanon’s debt to GDP ratio is the third largest in the world.
“Directors stressed that an immediate and substantial fiscal adjustment is essential to improve debt sustainability, which will require strong and sustained political commitment,” the IMF executive board statement said.
It reiterated estimates of low economic growth of 1-1.5 percent in 2017 and 2018. “The traditional drivers of growth in Lebanon are subdued with real estate and construction weak and a strong rebound is unlikely soon,” it said.
“Going forward, under current policies growth is projected to gradually increase toward 3 percent over the medium term.”
Lebanon’s economy has been hit by the war in neighboring Syria. Annual growth rates have fallen to between 1 and 2 percent, from between 8 and 10 percent in the four years before the Syrian war. Two former pillars of the economy, Gulf Arab tourism and high-end real estate, have suffered.
Caretaker Prime Minister Saad Hariri has been designated to form a new government following parliamentary elections last month, Lebanon’s first since 2009, and has stressed the need for the state to see through long-delayed economic reforms.
Donor states and institutions are looking to Lebanon to implement the reforms in order to release billions of dollars worth of financing pledged at a conference in Paris in April. In Paris, Hariri promised to reduce the budget deficit as a percentage of GDP by five percent over five years.
The directors “noted that a well-defined fiscal strategy, including a combination of revenue and spending measures, amounting to about 5 percentage points of GDP, is ambitious but necessary” to stabilize public debt and put it on a declining path over the medium term.
They recommended increasing VAT rates, restraining public wages, and gradually eliminating electricity subsidies. Last year the government spent $1.3 billion subsiding the state power provider — 13 percent of primary expenditures.