Future of Gulf construction looks brighter, says survey

Construction work on the King Abdullah Financial District, north of Riyadh, Saudi Arabia. (REUTERS)
Updated 30 January 2018

Future of Gulf construction looks brighter, says survey

LONDON: There are signs of improving optimism in the Gulf construction sector, despite continued worries about delayed payments and contract disputes, a new report said.
Overall sentiment in the building industry has risen by seven percent in the last two years, from 32 to 39 percent, a survey conducted by law firm Pinsent Masons’ found. The majority of the companies surveyed are involved in projects with a value of more than AED500 million ($136 million).
The UAE came out on top as the market expected to generate the most growth in the region, with 38 percent of respondents saying they expected the country to generate the most opportunity over the next 12 months.
“The UAE is set to see an increase in the number of projects during 2018 and we expect the country to remain in top position, particularly in the lead-up to Expo 2020,” said Sachin Kerur, head of Middle East region at Pinsent Masons.
Sentiment toward Saudi Arabia also improved, according to the survey, with 29 percent of respondents expecting the Kingdom to provide the biggest opportunities over the next 12 months. 
In 2016 just 11 percent of respondents said they saw the most opportunities in the Kingdom.
There were also pockets of pessimism, with 20 percent of those surveyed expecting their order books to decline by more than 10 percent in the coming months.
Around 86 percent of businesses said contract conditions have become less favorable during 2017, which is roughly in line with sentiment in 2016, while the same proportion said payment periods were longer in 2017 than the previous year.
Close to 70 percent of respondents said they were involved in more disputes during 2017 than had been expected.
“Whilst analysts predict a slight economic revival across many GCC markets during 2018, the survey results are indicative of what has been a challenging time for the construction sector — which has grappled with the impact of lower oil prices and ongoing geopolitical tensions,” said Sachin.
The report also highlighted the rising importance of Public-Private Partnerships (PPP) to attract inward investment into the industry. The survey found that 40 percent of respondents were currently involved or expected to be involved in PPP projects during the next 12 months. This compares to 32 percent in 2016.

Egypt signs lucrative gas deals

Updated 49 min 4 sec ago

Egypt signs lucrative gas deals

  • Five agreements were signed during the last fiscal year

CAIRO: The Egyptian Natural Gas Holding Company (EGAS) has signed eight research and exploration agreements with investments of $934 million.

Five agreements were signed during the last fiscal year and three others during the first quarter of this fiscal year.

Minister of Petroleum and Mineral Resources Tarek El-Molla said that the integrated strategy adopted by the ministry to develop Egypt’s natural gas resources has succeeded in recording the highest rates of natural gas production in the history of the country, achieving gas self-sufficiency and resuming exports.

He said that natural gas plays a significant role in achieving economic returns, in addition to attracting new international companies to work in the field of research and exploration in Egypt.

El-Molla said a project to transform Egypt into a regional center for the handling and trade of gas and oil is being planned.

The minister stressed the importance of implementing the national project for providing natural gas to all Egyptian governorates and citizens.

Magdy Galal, EGAS head, reviewed the development of natural gas production rates during the past five years and the efforts to confront the natural decrease of wells.

He said that during the recent fiscal year, the company signed a total of five agreements. On top of the $934 million in investments, there were also signing grants worth $51 million.

He added that the company has 37 ongoing agreements, a result of a Ministry of Petroleum and Mineral Resources strategy, which attracted new investments and the entry of Exxon Mobil and Chevron in the field of research and exploration in Egypt, and an increase in investments from companies such as Shell and Total.

He said the company is finalizing six other agreements with investments of $731 million and $14 million in signing grants.