Saudi Arabia well equipped to sustain oil market share

Saudi Arabia well equipped to sustain oil market share
Updated 28 January 2016

Saudi Arabia well equipped to sustain oil market share

Saudi Arabia well equipped to sustain oil market share

JEDDAH: OPEC’s oil production is expected to rise by a further 500,000 barrels per day by Q4 2016 year-on-year, according to a report released by Jadwa Investment.
It said that the current period of low prices is set to remain throughout 2016, pulled down primarily as a result of persistently high oil supply. All-out competition between members of OPEC will be the main reason for continued oversupplied markets.
But Saudi Arabia remains well equipped to hold off any attempts of encroachment on its market share since it is currently the only major oil producer with spare oil production capacity, Jadwa economists added.
Saudi Arabia’s (3 percent of global oil demand) total crude consumption is expected to average 2.8 million barrels per day in Q4 2015 up 5 percent compared to the same period last year, states the Quarterly Oil Market Update released by Jadwa Investment this week.
The rise in oil demand is largely a result of the start up of the 400,000 barrels per day Yasref refinery which came online earlier in 2015.
Latest data shows that year-to-November 2015 crude demand was also at 2.8 million barrels per day, up 8 percent year-on-year, and slightly below our forecasted 2.9 million barrels per day for the full year 2015.
“We expect lower consumption in line with seasonal demand during cooler months in Q1 2016,” said the Jadwa research team.
“Looking further ahead in 2016, while demand for crude will increase as three new crude oil-powered electricity plants come online, higher domestic energy prices and increases in gas output will help keep consumption flat year-on-year,” said the report.
The Hasbah and Arabiyah gas fields will produce non-associated gas processed by the Wasit plant, said the Jadwa report.
“According to Saudi Aramco, the Wasit gas plant will add around 1.75 billion cubic feet of sales gas per day (bcf/d), which we expect will replace the use of more expensive industry diesel and crude oil in generating electricity,” said the economists.
According to the report, total oil output from OPEC rose by 5 percent in Q4 2015, year-on -year, as a result of large increases from Iraq (up 22 percent) and Iran (up 10 percent), which pushed the organization’s quarterly average to 32.5 million barrels per day.
OPEC production in December 2015 was 2 million barrels per day higher than the November 2014 total, when it switched to defending market share from its previous policy of cutting output to maintaining prices.
Jadwa economists believe that lower for longer oil prices will have a direct implication over the kingdom’s current account and fiscal budget.
“We have therefore revised down our forecast for the kingdom’s fiscal and external balances for 2016,” they said.
The fiscal deficit is now expected to reach SR402 billion (17.8 percent of GDP), up from SR313 billion forecasted previously, according to the report.
Imbedded in our new forecast is a sharper reduction in total government spending to SR890 billion, down from our earlier forecast of SR922 billion.
“This reduction in spending will likely be achieved by a stronger implementation of initiatives specified in the budget announcement, which included proposed reforms to improve budgetary procedures, and reviews to existing government projects,” said the Jadwa research team.
“While we now forecast spending to be lower for 2016, our forecast of a steeper decline in total revenue (from SR609 billion to SR488 billion) will mean that the deficit will widen in 2016,” the report added.
The lower spending by the government will cause the non-oil private sector to post a slower growth than previously anticipated.
“We therefore expect growth in non-oil private sector activity to slow down to 2.6 percent, compared to our previous forecast of 2.8 percent. However, we maintain our view that overall GDP will expand by 1.9 percent in 2016,” said the economists.
“We have revised down our forecast for the 2016 current account deficit from $40 billion (6.3 percent of GDP), to $72 billion (12 percent of GDP),” they said.
“As a result of the decline in prices, we think 2016 oil export revenues will fall to their lowest levels since 2003 to reach $101 billion. We expect both non-oil exports and imports to rise marginally compared to their 2015 levels,” said the Jadwa researchers.
The deficit in the services account will meanwhile shrink as a result of lower expected demand for services during 2016.
“We have also revised our forecast for inflation to 3.9 percent, up from 2.5 percent previously. The recent increase to energy and water prices will likely put pressure on prices of multiple components of the headline index, including the housing, electricity, and water, and the transport components,” said the Jadwa economists.


Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm

Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm
Updated 11 May 2021

Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm

Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm
  • Turkey’s Karadeniz supplies electricity to Lebanon from power barges

ISTANBUL: Turkey’s Karadeniz, which supplies electricity to Lebanon from power barges, told Beirut to halt action by the Lebanese prosecutor to seize its vessels and said it must draw up a plan to settle arrears to avoid a cut in supplies, a spokesperson said.
The spokesperson for Karpowership, a unit of Karadeniz that operates floating power plants, was speaking on Tuesday after Lebanon’s Finance Ministry cited a lawmaker saying the country had been threatened with a cut to its supplies.
A Lebanese prosecutor issued a decision last week to seize the barges and fine the firm after TV channel Al-Jadeed reported corruption allegations tied to the power contract. The firm denies the charges and says it has not been paid for 18 months.


Suez Canal boss reveals expansion plans as revenues jump on trade rebound

Suez Canal boss reveals expansion plans as revenues jump on trade rebound
Updated 11 May 2021

Suez Canal boss reveals expansion plans as revenues jump on trade rebound

Suez Canal boss reveals expansion plans as revenues jump on trade rebound
  • Revenues rose almost 16 percent in April to $551million

RIYADH: Suez Canal revenues rose almost 16 percent in April to $551 million compared to a year earlier, Asharq Business reported, citing Suez Canal Authority Chairman Osama Rabie.
Rabie also discussed plans to expand and deepen the southern sector of the canal in which the container ship Ever Given was stuck in March, creating chaos across the global supply chain.
That incident which brought a large proportion of seaborne trade to a near halt for a week, highlighted the need to ensure the  smooth operation of the key trade artery.
Rabie also revealed plans for dredging works for the maintenance of the navigational channel of the canal.
A plan is being implemented to restructure the authority’s companies, he said.
This year witnessed a slight increase in the number of ships passing through the waterway to 1,840 in April 2021 from 1,731 in April 2020, Al Arabiya reported.


Egypt jobless rate rises amid pandemic second wave

Egypt jobless rate rises amid pandemic second wave
Updated 11 May 2021

Egypt jobless rate rises amid pandemic second wave

Egypt jobless rate rises amid pandemic second wave
  • The size of the workforce was estimated at 29,284 million, compared to 29,965 million during the previous quarter

RIYADH: Egypt’s unemployment rate reached 7.4 percent of the total labor force in the first quarter of 2021 — up from 7.2 percent in the previous quarter.
The new data from the Central Agency for Public Mobilization and Statistics (CAPMAS), reflects the impact of the second wave of the pandemic.
The size of the workforce was estimated at 29,284 million, compared to 29,965 million during the previous quarter, representing a decrease of 2.3 percent, Al Arabiya reported.
The labor force in urban areas reached 13,034 million, with 16,250 million living in rural areas.
Gehan Saleh, economic affairs adviser to Egypt’s prime minister said in April that the second stage of the country’s economic reform program would be launched soon.
She said the plan aims to improve the quality of life of citizens and tackle unemployment through job-creating investments.


Smugglers post gold from Dubai to India hidden in Tang

Smugglers post gold from Dubai to India hidden in Tang
Updated 11 May 2021

Smugglers post gold from Dubai to India hidden in Tang

Smugglers post gold from Dubai to India hidden in Tang
  • It is the latest ruse by smugglers trying to avoid hefty import duties for the precious metal by employing increasingly intriguing methods

DUBAI: Indian customs have foiled an attempt to post gold from Dubai disguised in containers of the popular Tang drink.

After sieving the contents of the drink mix, Chennai customs officials discovered it had been mixed with gold granules, according to a statement from the Commissioner of Customs at Chennai International Airport.
Officials probing the racket found that the address of the receiver had been misused.
It is the latest ruse by smugglers trying to avoid hefty import duties for the precious metal by employing increasingly intriguing methods.
Earlier this year officials at Chennai airport also nabbed two men trying to smuggle gold through the airport underneath their wigs.
The hapless pair were nabbed after their unusual hairstyles caught the attention of officials.

They were found to be carrying two gold paste packets weighing almost 700 g


UK-based tower operator to acquire Omantel sites in $575m deal

UK-based tower operator to acquire Omantel sites in $575m deal
Updated 11 May 2021

UK-based tower operator to acquire Omantel sites in $575m deal

UK-based tower operator to acquire Omantel sites in $575m deal
  • The move signals Helios Towers’ entry to the Middle East market as a major tower infrastructure provider

DUBAI: British telecommunications company Helios Towers has signed a deal with Omantel to acquire 2,890 sites for $575 million from the sultanate’s largest mobile network operator.
The move signals Helios Towers’ entry to the Middle East market as a major tower infrastructure provider.
The deal is expected to bring in a $59 million bump in revenues in the first full year of operations.
It also involves a $35 million plan to add 300 new build-to-suit sites over the next seven years.
“We view Oman as a very attractive and supportive market for foreign investments, with strong growth and exciting future prospects,” the UK-based company’s chief Kash Pandya said in a statement.
He said the acquisition strengthens its business through “further hard-currency revenues and diversification” in what the CEO described as the fastest growing markets in the region.
“We look forward to working with Omantel and the other MNOs over the coming years to further develop next generation mobile infrastructure solutions and services in Oman,” he added.
The partnership reflects Oman’s FDI aspirations, Omantel CEO Tala Said Al-Mamari said, adding it will create jobs and opportunities in the country.
“This move also allows the monetization of our towers at attractive valuation levels, de-lever our balance sheet, and will accelerate network development in next generation advanced technologies,” he noted.
He said it would allow Omantel’s management to focus on innovation and product development while outsourcing infrastructure management to an independent firm.
The transaction will close by the end of 2021, and the long-term partnership will last for an initial period of 15 years.