MENA fashion industry could create jobs for 20 million women

Model Bella Hadid, front, leads other models as they wear creations as part of the Roberto Cavalli women’s Fall/Winter 2018-2019 collection, presented during the Milan Fashion Week. Saudi Arabia is investing heavily in its own nascent industry. (AP)
Updated 24 February 2018
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MENA fashion industry could create jobs for 20 million women

LONDON: A fashion industry is taking shape in the MENA region that could create jobs for up to 20 million women, the Arab Fashion Council has said.
The organization, which aims to unite 22 Arab countries under one umbrella, is laying the framework for a style sector stretching from North Africa to the Gulf.
Countries will be divided into three clusters to harness the strengths of local economies and create a sustainable fashion infrastructure that reaches across the region, said Jacob Abrian, founder and chief executive of the Arab Fashion Council. “This way we are connected in terms of creative economy — every country will be pioneering its own expertise.”
North Africa will provide the raw materials and textiles, building on an established manufacturing industry, while the factories of the Levant will be used for finishing and assembling the products. Retail will be concentrated in the Gulf, where cities such as Dubai and Abu Dhabi attract shoppers from all over the world. “By doing this we estimate having 20 million women as part of the system from all over the Arab world,” Abrian said.
This is an opportunity to “create a completely new economy,” he said.
On Monday, Princess Noura Bint Faisal Al-Saud, honorary president of the Arab Fashion Council, which recently announced plans to open a regional office in the Kingdom, said Saudi Arabia would host its first Arab Fashion Week in Riyadh this March.
Reading a letter from the General Entertainment Authority in Saudi Arabia, she said: “Saudi Arabia’s artistic community has been growing in size and in confidence for a number of years and the General Entertainment Authority believes that such an event will allow a proper platform to showcase their fashion and arts talents as the vehicle for a comprehensive range of entertainment options in Saudi Arabia.
“The General Entertainment Authority is proud to support an event that seeks to bring people together in a mutual appreciation of the power of fashion and art.”
Arwa Al-Banawi, a Saudi designer who regularly exhibits at Paris Fashion Week, said the Kingdom has been a regional fashion hub “for years but never on a global level.”
“There’s so much talent and so many buyers and beautiful boutiques in Saudi — we have the right people that can actually make this happen and make it a hub,” Al-Banawi said.
Saudi designers are an established presence on the runways of London, Paris and Milan but this is the first time the catwalks will come to the Kingdom for Arab Fashion Week.
The inaugural Saudi Arab Fashion week will take place in Riyadh next month, but preparations have been underway for some time to get major brands on board and secure a high-profile guest list.
Princess Noura told Arab News that before the news was announced, organizers had already struck a deal with Harvey Nichols Riyadh to support the trunk shows and begun compiling a star-studded guest list, featuring established names from the Arab fashion community and international heavyweights such as Roberto Cavalli.
“We’re opening doors for all international markets to come to Saudi Arabia … welcoming any brand, whether it’s high-end couture, ready-to-wear ... local or international,” she said, describing the emergence of “a more diversified market.”
“This event is just the beginning; it’s a marketing tool to say this is Saudi Arabia, we’re open, you’re welcome to come.”
The Arab Fashion Council recently announced a new partnership with the British Fashion Council to support its regional growth strategy while providing a gateway for UK fashion brands to the region. British brands, including Burberry, Erdem and Ralph & Russo, are popular among style-savvy Saudis but the alliance will also help fast-track some of the emerging talent that London is famous for.
Caroline Rush, chief executive of the British Fashion Council, said in a statement: “We are delighted to be working with AFC who represent an incredibly important market for British fashion designers. We are looking forward to developing a strategy for brands and businesses looking to expand into the Arabic countries through this collaboration with AFC, who are experts in this field. The British Fashion Council’s role in this partnership is to share their expertise in setting up infrastructure to nurture and discover Arabic design talent of the future.”
MENA countries are keen to tap into a global fashion industry worth an estimated $3 trillion, said Layla Issa Abuzaid, Saudi Arabia country director at the Arab Fashion Council, adding that the BFC’s support would help strengthen the fashion sector in Saudi Arabia, which is among the fastest-growing in the world: “As an economy, our fashion sector in Saudi Arabia is growing at a rate of 73 percent a year.”
She emphasized the scope of the Saudi fashion industry to support other sectors such as tourism, hospitality, travel and trade. “For all international brands it is a great market to explore.”
“Fashion has always been important to Arabs and our designers are definitely benefiting from the beginning of a proper fashion infrastructure,” said Marriam Mossalli, a well-known Saudi fashion editor and founder of luxury consulting firm Niche Arabia
In a previous interview with Arab News, she said: “We are seeing the creative sector in Saudi grow exponentially.”
“With a population that has 70 percent under the age of 30, we are about to see an influx of of new careers, and most importantly new creative industries.”
“There is an ever-growing appreciation in Saudi society for fashion,” said Mohammed Khoja, a Saudi designer. “Fashion, as an art form, is very far reaching and due to current efforts and investments in the industry and in manufacturing in the Kingdom, I believe that we’ll begin to see the fashion infrastructure grow in 2018.”
Alia Khan, chairwoman of the Islamic Fashion and Design Council, which is also planning to open an office in the Kingdom, believes the Saudi fashion industry will become a key driver for the local economy. “Saudi Arabia is a very important market and I don’t think we’ve even begun to understand the level of talent that comes from the Kingdom.”
Discussing the opportunities created by recent reforms, she said: “I think now we’re going to start seeing a little bit more of the vast talent and range of skill they have.”
“Saudi Arabia will be a big driver in style … there’s going to be a strong demand for Saudi-based fashion.
“A lot of people will be watching
this space.”


Permian shale output closes gap with Saudi Arabia as rig count doubles, confirming US’ powerhouse status

Updated 21 March 2019
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Permian shale output closes gap with Saudi Arabia as rig count doubles, confirming US’ powerhouse status

  • Exxon’s 1.6 million acres in the Permian means it can approach the field as a “megaproject”
  • The majors’ Permian investments position the field to compete with Saudi Arabia as the world’s top oil-producing region

NEW MEXICO: In New Mexico’s Chihuahuan Desert, Exxon Mobil Corp. is building a massive shale oil project that its executives boast will allow it to ride out the industry’s notorious boom-and-bust cycles.
Workers at its Remuda lease near Carlsbad — part of a staff of 5,000 spread across New Mexico and Texas — are drilling wells, operating fleets of hydraulic pumps and digging trenches for pipelines.
The sprawling site reflects the massive commitment to the Permian Basin by oil majors, who have spent an estimated $10 billion buying acreage in the top US shale field since the beginning of 2017, according to research firm Drillinginfo Inc.
The rising investment also reflects a recognition that Exxon, Chevron, Royal Dutch Shell and BP Plc largely missed out on the first phase of the Permian shale bonanza, while more nimble independent producers, who pioneered shale drilling technology, leased Permian acreage on the cheap.
Now that the field has made the US the world’s top oil producer, Exxon and other majors are moving aggressively to dominate the Permian and use the oil to feed their sprawling pipeline, trading, logistics, refining and chemicals businesses. The majors have 75 drilling rigs here this month, up from 31 in 2017, according to Drillinginfo. Exxon operates 48 of those rigs and plans to add seven more this year.
The majors’ expansion comes as smaller independent producers, who profit only from selling the oil, are slowing exploration, and cutting staff and budgets amid investor pressure to control spending and boost returns.
Exxon CEO Darren Woods said on March 6 that Exxon would change “the way that game is played” in shale. Its size and businesses could allow Exxon to earn double-digit percentage returns in the Permian Basin even if oil prices — now above $58 per barrel — crashed to below $35, added Senior Vice President Neil Chapman.
Exxon’s 1.6 million acres in the Permian means it can approach the field as a “megaproject,” said Staale Gjervik, head of shale subsidiary XTO Resources, whose headquarters was recently relocated to share space with its logistics and refining businesses. The firm also recently outlined plans to nearly double the capacity of a Gulf Coast refinery to process shale oil.
“It sets us up to take a longer-term view,” Gjervik said.
The majors’ Permian investments position the field to compete with Saudi Arabia as the world’s top oil-producing region and solidifies the US as a powerhouse in global oil markets, said Daniel Yergin, an oil historian and vice chairman of consultancy IHS Markit.
“A decade ago, capital investment was leaving the US,” he said. “Now it’s coming home in a very big way.”
The Permian is expected to generate 5.4 million barrels per day (bpd) by 2023 — more than any single member of the Organization of the Petroleum Exporting Countries (OPEC) other than Saudi Arabia, according to IHS Markit. Production this month, at about 4 million bpd, will about double that of two years ago.
Exxon, Chevron, Shell and BP now hold about 4.5 million acres in the Permian Basin, according to Drillinginfo. Chevron and Exxon are poised to become the biggest producers in the field, leapfrogging independent producers such as Pioneer Natural Resources.
Pioneer recently dropped a pledge to hit 1 million bpd by 2026 amid pressure from investors to boost returns. It shifted its emphasis to generating cash flow and replaced its CEO after posting a fourth-quarter profit that missed Wall Street earnings targets by 36 cents a share.

 

Meanwhile, Shell is considering a multibillion-dollar deal to buy independent producer Endeavor Energy Resources, according to people familiar with the talks. Shell declined to comment and Endeavor did not respond to a request.
Chevron said it would produce 900,000 bpd by 2023, while Exxon forecast pumping 1 million barrels per day by about 2024. That would give the two companies one-third of Permian production within five years.
At first, the rise of the Permian was driven largely by nimble explorers that pioneered new technology for hydraulic fracturing, or fracking, and horizontal drilling to unlock oil from shale rock, slashing production costs. The advances by smaller companies initially left the majors behind. Now, those technologies are easily copied and widely available from service firms.
Surging Permian production has overwhelmed pipelines and forced producers to sell crude at a deep discount, sapping cash and profits of independents who, unlike the majors, don’t own their own pipeline networks.
Even as the majors have ramped up operations, the total number of drilling rigs at work in the Permian has dropped to 464, from 493 in November, as independent producers have slowed production, according to oilfield services provider Baker Hughes.
Shell, by contrast, plans to keep expanding even if prices fall further, said Amir Gerges, Shell’s Permian general manager.
“We have a bit more resilience” than the independents,” he said.
In west Texas, the firm drills four to six wells at a time next to one another, a process called cube development that targets multiple layers of shale as deep as 8,000 feet.
Cube development is expensive and can take months, making it an option only for the majors and the largest independent producers. Shell has used the tactic to double production in two years, to 145,000 bpd.
The largest oil firms can also take advantage of their volume-buying power even if service companies raise prices for supplies or drilling and fracking crews, said Andrew Dittmar, a Drillinginfo analyst.
“It’s like buying at Costco versus a neighborhood market,” he said.
The majors’ rush into the market means smaller companies are going to struggle to compete for service contracts and pay higher prices, said Roy Martin, analyst with energy consultancy Wood Mackenzie.
“When you’re sitting across the negotiating table from the majors, the chips are stacked on their side,” he said.
The revival of interest in the Permian marks a reversal from the late 1990s, when production had been falling for two decades.
“All the majors and all the companies with names you’ve heard left with their employees,” said Karr Ingham, an oil and gas economist. “Conventional wisdom was this place was going to dry up.”
Chevron was the only major that stayed in the Permian. It holds 2.3 million acres and owns most of its mineral rights, too, but until recently left drilling to others.
But this month, CEO Mike Wirth called the Permian its best bet for delivering profits “north of 30 percent at low oil prices.”
“There is nothing we can invest in that delivers higher rates of return,” Wirth said this month at its annual investor meeting in New York.
Matt Gallagher, CEO of Parsley Energy Inc, calls the majors’ investments “the best form of flattery” for independents operating here.
Parsley holds 192,000 Permian acres — most of which was snatched up on the cheap during oil busts — and sees its smaller size as an advantage in shale.
“We’re not finished yet,” Gallagher said. “We can move very quickly.”
The majors have greater infrastructure, but independents continue to innovate and design better wells, said Allen Gilmer, a co-founder of Drillinginfo.
“Nothing is a bigger motivator than, ‘Am I going to be alive tomorrow?’” Gilmer said.
“Hunger and fear is something that every independent oil-and-gas person knows — and that something no major oil-and-gas person has ever felt in their career.”

FACTOID

5.4 million

The Permian Basin is expected to generate 5.4 million barrels of oil per day by 2023, more than any single OPEC member other than Saudi Arabia.