Shared vision, commitment to integration underlie Gulf trade deals

Saudi Crown Prince Mohammed bin Salman is welcomed by the Sultan of Oman, Haitham bin Tariq, upon his arrival at the airport in the Omani capital Muscat on December 6, 2021. (AFP)
Saudi Crown Prince Mohammed bin Salman is welcomed by the Sultan of Oman, Haitham bin Tariq, upon his arrival at the airport in the Omani capital Muscat on December 6, 2021. (AFP)
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Updated 08 December 2021

Shared vision, commitment to integration underlie Gulf trade deals

Saudi Crown Prince Mohammed bin Salman is welcomed by the Sultan of Oman, Haitham bin Tariq, upon his arrival at the airport in the Omani capital Muscat on December 6, 2021. (AFP)
  • Saudi firms have signed agreements with partners in the Sultanate worth $10 billion 
  • Like Saudi Arabia, Oman has a strategy to build a post-oil economy with a strong fiscal base

DUBAI: The signing of new investment deals reportedly worth $30 billion between Saudi Arabia and Oman is no doubt a positive development for solidifying cooperation between the member countries of the Gulf Cooperation Council. Yet the first questions that spring to mind are: Why Oman and why now?

From a geopolitical perspective, Saudi Arabia’s move is important as the Kingdom is now using its immense economic clout to support its smaller neighbors, starting with Iraq to the north and now Oman to the southeast.

It is broadly accepted that the region’s future social and political stability require economic stability. Many of Saudi Arabia’s neighbors are oil-producing nations whose journeys towards diversifying their economies to embrace other industries and markets are only just beginning.

Investment is seen as an effective way to help these countries move away from oil and generate more jobs in other sectors. But for Saudi investments to be of any long-term positive significance, they must align with the national and strategic goals of both countries.

Much like Saudi Arabia, Oman has its own reform agenda known as Oman Vision 2040, which aims to turn the Sultanate into an economic powerhouse with a sustainable fiscal and economic base. What Oman needs to make this bold vision a reality is access to the financial capital needed to expand its economy.

With its aging wells and reservoirs, Oman’s oil industry will require massive investment to maintain current capacity. The Sultanate is clearly aware that oil will not be its sole source of revenue in the future. In fact, its 2021 budget was drafted on the basis of oil costing a paltry $45 per barrel.

To help Oman realize its post-oil potential, Saudi Arabian companies have signed a raft of trade and infrastructure deals with their Omani counterparts that will not only increase foreign direct investments into the Sultanate, but also enhance its economic diversification.




As part of the visit of Crown Prince Mohammed bin Salman, Saudi and Omani companies signed 13 MoUs related to joint work in economic sectors. (SPA)

Looking at energy investments in particular, the first agreement entails replicating what Saudi Arabia is doing in NEOM — its new high-tech smart-city on the Kingdom’s western Red Sea coast.

Omani energy provider OQ Group signed three of the agreements, the first of which was with Saudi Arabia’s ACWA Power and Air Products in the fields of petrochemicals, renewable energy and green hydrogen.

With this deal, Saudi Arabia is expanding its green hydrogen plan beyond its own borders and into Oman, which will boost the overall supply of hydrogen coming from the GCC.

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Hydrogen has become a viable contender for energy transition away from environmentally harmful fossil fuels. Oman is ideally located to supply hydrogen to southeast and east Asian markets, while NEOM is better placed to ship it to European markets.

The second energy deal, relating to oil storage, was signed with Saudi Aramco, and the third, involving development of Oman’s Duqm Petrochemical Complex project, with SABIC.

Saudi Aramco’s strategy is to expand storage beyond the Strait of Hormuz. Bypassing the narrow waterway will help reduce the threat to shipping posed by blockades and even piracy, which risk wreaking havoc for global oil prices.

As for SABIC’s deal, Duqm is attracting more attention now that the joint Kuwait-Oman refinery is nearing completion. This will allow SABIC to have better access to feedstocks while utilizing Omani products. The impact of this will be reflected in job creation, a new petrochemical hub in Duqm and valuable knowledge transfer. 




Sultan of Oman presents Oman Civil Order of the First Class to HRH Crown Prince, in recognition of brotherly ties, excellent relations and constructive cooperation. (SPA)

It is not just the energy sector that has benefited from the deals. The tourism industry in Oman can also expect a flood of new investments. Omran Group has signed a memorandum with the Saudi Dar Al-Arkan Real Estate Development Company for the development of the Yetti Beach in Oman.

Omran is known for creating sustainable and authentic tourism assets and lifestyle communities and destinations designed to drive economic growth and contribute to the diversification of the economy.

Oman-based firm Asyad, a logistics group, has signed an agreement with Saudi Bahri, a transportation and logistics company, while Minerals Development Oman signed a deal with the Kingdom’s Maaden Phosphate Co. to boost cooperation in the mining sector.

As for the timing, both counties have the means and the will to invest for the future. Oil prices are high, giving both countries the resources they need to support their shared national visions.

If all goes according to plan, Oman could be on track to realize its national goals well in advance of 2040, allowing it to join the 2030 club.


Boeing invests $450m in flying taxi developer Wisk

Boeing invests $450m in flying taxi developer Wisk
Image: Shutterstock
Updated 11 sec ago

Boeing invests $450m in flying taxi developer Wisk

Boeing invests $450m in flying taxi developer Wisk

Boeing Co. is investing a further $450 million in Wisk to support development of future pilotless flying taxis, the US aerospace giant said on Monday.


California-based Wisk, owned by Boeing and Kitty Hawk, was launched by Google co-founder Larry Page and is one of dozens of businesses electric vertical takeoff and landing (eVTOL) aircraft but differs in making them autonomous from the outset.


Choice hotels, Saudi Seera Group launch two new hotels in the Kingdom

Choice hotels, Saudi Seera Group launch two new hotels in the Kingdom
Updated 3 min 21 sec ago

Choice hotels, Saudi Seera Group launch two new hotels in the Kingdom

Choice hotels, Saudi Seera Group launch two new hotels in the Kingdom

RIYADH: Two new hotels have launched in Saudi Arabia as part of a bigger plan between hospitality firm Choice Hotels EMEA and Saudi tour operator Seera Group,

Under the collaboration, at least 10 hotels will be opened in the Kingdom in the next five years.

The first hotel launched through the partnership — Clarion Hotel Jeddah Airport — has 200 rooms and is located near the Jeddah Airport Train Station.

The second hotel, Comfort King Road, has 125 suites and is situated near Jeddah Corniche.

Majed Alnefaie, CEO of Seera Group, said the collaboration falls in line with Saudi Vision 2030 and aims to “strengthen inward tourism and to build a robust infrastructure that will enable the Kingdom to realize the goals of economic diversification.”


Panasonic to invest $700 million to produce Tesla EV battery: Nikkei

Panasonic to invest $700 million to produce Tesla EV battery: Nikkei
Image: Shutterstock
Updated 23 min 41 sec ago

Panasonic to invest $700 million to produce Tesla EV battery: Nikkei

Panasonic to invest $700 million to produce Tesla EV battery: Nikkei
  • Japan’s Panasonic will begin producing its new lithium-ion battery for Tesla from as early as 2023

Japan’s Panasonic will begin producing its new lithium-ion battery for Tesla from as early as 2023, with plans to invest about 80 billion yen ($705 million) in production facilities in Japan, the Nikkei reported on Monday.


The powerpack could help make electric vehicles (EVs) more attractive to motorists by extending cruising range by about a fifth, the Nikkei reported, without saying where it obtained the information.


“We are studying various options for mass production, including a test production line we are establishing this business year. We don’t, however, have anything to announce at this time,” Panasonic said in a statement sent to Reuters.


Panasonic unveiled the 4680 format (46 millimeters wide and 80 millimeters tall) battery in October.

At around five times as big as batteries it currently supplies to Tesla, it is also expected to help the US electric vehicle maker lower production costs.


Panasonic will make the 4680 batteries at a plant in Wakayama prefecture in Western Japan, with output of less than 10 gigawatt hours a year, equivalent to around 150,000 vehicles, the Nikkei said.


Panasonic is the sole maker of the more advanced Tesla battery, ensuring it remains a key supplier to the US company, at least for its pricier models, even as the EV maker seeks out battery suppliers in China and elsewhere.


Oil giant Aramco signs 50 agreements during 6th iktva forum

Oil giant Aramco signs 50 agreements during 6th iktva forum
Updated 25 min 8 sec ago

Oil giant Aramco signs 50 agreements during 6th iktva forum

Oil giant Aramco signs 50 agreements during 6th iktva forum

RIYADH: Saudi oil giant Aramco signed 50 new agreements at the In-Kingdom Total Value Add forum and exhibition, known as iktva, amid its supply chain resilience enhancement.

The agreements include a climate leadership and digitalization deal with Schlumberger; equipment localization procurement agreements with Cameron, Technip FMC and Baker Hughes companies; and a partnership deal on pressure vessel fabrication localization with Larsen & Toubro.

Aramco also signed agreements with Sutherland Global Services on smart city services localization; a desalination agreement with Tanajib Cogeneration Power Co.; and a localization of process automation solutions partnership with US’s Honeywell. 

The iktva program increased Aramco’s spending with domestic suppliers in 2021 to 59 percent, up from 35 percent in 2015 when the program was launched.

Amid global supply chain disturbances, the program aims to drive domestic value creation, maximize long-term economic growth and diversification to develop a sustainable and globally competitive energy sector in the Kingdom. 

“It wasn’t possible to foresee the consequences of the COVID-19 pandemic, but iktva helped us to prepare for the disruptions it caused to the global supply chain,” Aramco CEO Amin Nasser said.

The three-day forum, running from Jan. 24 to 26 at Dhahran EXPO, showcases progress in Aramco's flagship business continuity initiative.

Held under the theme ‘Paving the way to Economic Success’, the forum recognizes the achievements of Aramco’s program partners across 10 categories, including overall iktva performance, training, Saudization, female representation and exports.

With local content contributing over $100 billion to the Saudi economy, iktva has attracted more than 540 investments to Saudi Arabia from 35 countries.

Major signings include:

  • Schlumberger – Partnership on climate leadership and digitalization through localization initiatives
  • Cameron/TechnipFMC/Baker Hughes – Wellhead equipment localization procurement agreements
  • Larsen & Toubro – Pressure vessel fabrication localization
  • Sutherland Global Services – Smart City services localization
  • Tanajib Cogeneration Power Company – Tanajib cogeneration and desalination agreement
  • Honeywell – Localization of process automation solutions
  • Alfanar Company - Carbon fiber investment collaboration

 


US PR firm Teneo launches Middle East financial advisory business 

US PR firm Teneo launches Middle East financial advisory business 
Image: Shutterstock
Updated 43 min 49 sec ago

US PR firm Teneo launches Middle East financial advisory business 

US PR firm Teneo launches Middle East financial advisory business 
  • The firm has services in hubs including Riyadh, Doha, and Dubai

RIYADH: US public relations and advisory firm, Teneo has launched a financial advisory business in the Middle East.

This comes as the corporation wishes to expand to key markets worldwide, with the Middle East posing as a potential growth opportunity.

As part of this move, the advisory firm has appointed Matthew Wilde and Elie Fakhoury to key roles.


Wilde is known for his role in various large scale and complex restructuring projects in the region including that of Arabtec, NMC Healthcare, Al Jaber, and others.

Fakhoury holds over 15 years of accumulated experience in the region, including covering extensive restructuring projects.

Teneo financial advisory business has around 350 employees worldwide and offering tools to tackle challenging business issues.

The firm has services in hubs including Riyadh, Doha, and Dubai.