With 500,000 jobs and 50 new companies, PIF finds Saudi Arabia a place in the sun

Special With 500,000 jobs and 50 new companies, PIF finds Saudi Arabia a place in the sun
PIF to develop 70 percent of the Kingdom’s renewable energy, in line with Vision 2030. (Shutterstock photo)
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Updated 29 May 2022

With 500,000 jobs and 50 new companies, PIF finds Saudi Arabia a place in the sun

With 500,000 jobs and 50 new companies, PIF finds Saudi Arabia a place in the sun
  • The progress made by the Kingdom in non-oil sectors indicates that KSA is moving ahead in the right direction

RIYADH: When Saudi Arabia announced its Vision 2030 in 2016, aimed at accelerating the growth of the non-oil sector, skeptics doubted how a nation that has been relying heavily on oil-based revenue for so many decades would execute it with perfection.

Six years later, the progress made by the country in non-oil sectors indicates that Kingdom is moving ahead in the right direction, primarily driven by the efforts of its Public Investment Fund, which always maximizes its assets for the Saudi economy.

As a part of PIF’s 2021-2025 strategy, it is spearheading new economic and business opportunities in the Kingdom and is redesigning the face of Saudi Arabia globally.

Fueling employment

PIF is currently one of the world’s largest and most influential sovereign wealth funds, with total assets under management at around $620 billion.

Since 2016, the PIF has founded 50 companies, including the recently launched Saudi Coffee Co., and altogether these firms have generated over 500,000 direct and indirect jobs.

FASTFACT

From real estate and infrastructure to recycling and clean energy, PIF has marked its presence in 13 strategic sectors and aims to create more job opportunities in the coming years.

From real estate and infrastructure to recycling and clean energy, PIF has marked its presence in 13 strategic sectors and aims to create more job opportunities in the coming years.

PIF formed these companies to directly benefit the private sector and Saudi citizens as they generate wealth and new job opportunities. Some notable examples include the PIF-owned giga-projects, namely NEOM, The Red Sea Development Co., Qiddiya and ROSHN.

PIF has also created entities like the National Security Services Co., Saudi Arabian Military Industries and the Soudah Development Co.

Accelerating growth

Moreover, several companies owned by PIF have signed contracts with private sector businesses, helping accelerate growth in the broader economy.

Citing an example, the Red Sea Development Co. has signed over 800 local and international contracts worth more than $5.3 billion as of April 2022.

ROSHN, PIF’s real estate company, has signed a contract with Arabia-based Retal help develop its Sedra community project in Riyadh.

Qiddiya Investment Company, last December, had awarded a Saudi-French joint venture a $1 billion contract to build the Six Flags Qiddiya entertainment attraction.

“The fund invested in several sectors, more than any other regular investment fund, and we should see the fruits of these investments this year and in 2030,” Mohammed Al-Suwayed, CEO of Razeen Capital, a financial securities consultancy firm, told Arab News.

The fund invested in several sectors, more than any other regular investment fund, and we should see the fruits of these investments this year and in 2030

Mohammed Al-Suwayed, CEO of Razeen Capital

An oasis of opportunities

Meanwhile, PIF has also created a new department specifically tasked with ensuring national growth and maximizing investment returns. The Fund aims to expand opportunities for Saudi companies, improve the domestic supply chain and increase its local content contribution to 60 percent by 2025.

PIF is working together with Shareek Program, spearheaded by Saudi Arabia’s Crown Prince Mohammed bin Salman, to create private-public partnerships.

PIF also eyes to boost the private sector’s contribution to the national gross domestic product to 65 percent and unlock national invest- ments worth $1.33 trillion by the end of this decade.

PIF will develop 70 percent of the Kingdom’s renewable energy, in line with Vision 2030

PIF Governor Yasir Al-Rumayyan

Green-lighting sustainability

Understanding the necessity to protect the environment, PIF is investing in many green projects to meet the ESG targets in Vision 2030.

PIF is planning to plant 10 million trees and launch a national renewable energy program to increase the share of renewable energy in the Kingdom.

“PIF will develop 70 percent of the Kingdom’s renewable energy, in line with Vision 2030,” said PIF Governor Yasir Al-Rumayyan.

He added that PIF’s recent investments in sustainable companies like ACWA Power and Lucid Motors show how the fund is working toward a sustainable future.

Al-Rumayyan also stressed the importance of PIF’s regional Voluntary Carbon Market in helping the Kingdom achieve its goal of net-zero carbon emissions by 2060.

The VCM is the first of its kind in the Middle East and North Africa region and will help companies reduce their carbon footprint by offsetting their carbon emissions.

The VCM is expected to launch in 2023, and five leading Saudi companies have already signed on as founding partners — Aramco, SAUDIA, ACWA Power, Ma’aden and ENOWA, a subsidiary of NEOM.

The PIF has also launched Sudair Solar PV, the first project under the Fund’s renewable energy program. This solar project, upon comple- tion, is expected to fulfill the energy needs of 185,000 house- holds in the Kingdom.

A force to reckon with

Since 1971, PIF’s glorious journey bears testimony to how a country’s sovereign fund can be utilized wisely and effectively to improve its economy and the living conditions of the general public.

With its massive investments, PIF has emerged as a critical player in the international economic sector and is also facilitating diversity and knowledge transfer within the Kingdom.

As PIF advances in elevating Saudi Arabia to new heights, several monumental initiatives that could revolutionize people’s living quality in the nation can be witnessed in the future.


Saudi authorities taking steps to prevent artificial price hike, says minister

Saudi Minister of Commerce Majid Al-Qasabi. (Supplied)
Saudi Minister of Commerce Majid Al-Qasabi. (Supplied)
Updated 06 July 2022

Saudi authorities taking steps to prevent artificial price hike, says minister

Saudi Minister of Commerce Majid Al-Qasabi. (Supplied)
  • After 13 months — specifically March 2021 — there were growing signs of economic recovery, Al-Qasabi said, but warning that there was an increase in demand versus supply

JEDDAH: Major events including the COVID-19 pandemic and war in Ukraine have caused price hikes around the world, Saudi Minister of Commerce Majid Al-Qasabi said in a periodic government communication conference on Tuesday.

The press conference discussed four key areas: Global events that led to price increases, the Saudi leadership’s guidance to address the effects of the hikes, repercussions of global events on prices, as well as a question and answer segment.

“Let us rewind two years and a half back to February 2020. The COVID-19 pandemic was an economic, social and mental tsunami. It was the biggest economic crisis in the world,” Al-Qasabi said.

“This pandemic affected the whole world all at once, and suddenly without any warning. We are still suffering from its effects,” he added.

“We stayed in the pandemic for 13 months, and after that, it was the beginning of recovery.”

After 13 months — specifically March 2021 — there were growing signs of economic recovery, Al-Qasabi said, but warning that there was an increase in demand versus supply.

“The demand was more than the supply, and this causes an imbalance in the market, when the demand exceeds the supply. Of course, the result will be that prices have risen,” he added.

Al-Qasabi pointed to the Suez Canal obstruction in March 2021 as another event that added to global economic woes.

“We saw the blockage of the navigational movement and the cessation of the navigational movement in the Suez Canal, then after three months — in July 2021 — the second variant of the virus appeared and imposed a curfew again, which caused the closure of some ports and some cities,” he said.

In February 2022, the Russia-Ukraine conflict began. The minister said that the war affected transportation, too.

“We had a crisis between Russia and Ukraine, and we still do not know how long this crisis will last. These events combined, overlapped and completed, leading to a crisis in transportation and supply chains,” he said.

The transportation and supply chain crisis includes the disruption of some transportation ports, such as the main port of Shanghai, a sixfold increase in the cost of transportation, as well as surging freight insurance rates.

Al-Qasabi hailed King Salman’s royal order on Monday that approved the allocation of SR20 billion ($5.32 billion) to help citizens mitigate the impacts of rising global prices.

Half of the allocated money will go to social insurance beneficiaries and the Citizen Account Program.


NRG Matters: QatarEnergy signs deal with Shell for $30bn North Field East project; Germany’s renewable energy consumption up

NRG Matters: QatarEnergy signs deal with Shell for $30bn North Field East project; Germany’s renewable energy consumption up
Updated 05 July 2022

NRG Matters: QatarEnergy signs deal with Shell for $30bn North Field East project; Germany’s renewable energy consumption up

NRG Matters: QatarEnergy signs deal with Shell for $30bn North Field East project; Germany’s renewable energy consumption up

RIYADH: On a macro level, the Dubai Supreme Council of Energy has discussed measures for monitoring petroleum product trading in the emirate. Zooming in, QatarEnergy has signed a deal with Shell for the Gulf state’s $30 billion North Field East expansion. 

Looking at the bigger picture

  •  Dubai Supreme Council of Energy has discussed measures for monitoring petroleum product trading in the emirate, according to WAM.
  • Renewable energy accounted for 49 percent of the total German power consumption in the first half of 2022, up 6 percent from a year earlier, Reuters reported. 

Industry groups have attributed this increase to favorable weather conditions. 

Through a micro lens:

  • QatarEnergy has signed a deal with Shell for the Gulf state’s North Field East expansion, the first phase of the world's largest liquefied natural gas project, according to Reuters.

This happens as the country partners with international companies in the first and largest phase of the nearly $30 billion expansion that will boost Qatar’s position as the world’s top LNG exporter.

  • Siemens Gamesa and Germany’s renewables developer wpd have signed a supply agreement for  a 927-megawatt Gennaker offshore wind power plant, according to Trade Arabia.

Located 15 kilometers off the German coast, the project will feature 103 Siemens Gamesa Direct Drive offshore wind turbines each with a 167-meter rotor.


Gas consumption set to contract due to Russia: IEA

Gas consumption set to contract due to Russia: IEA
Updated 05 July 2022

Gas consumption set to contract due to Russia: IEA

Gas consumption set to contract due to Russia: IEA

Gas consumption will contract slightly this year due to high prices and Russian cuts to Europe, with only slow growth over coming years as consumers switch to alternatives, the International Energy Agency said on Tuesday.

The IEA chopped its forecast for global gas demand by more than half in its latest quarterly report on gas markets.

It now expects growth of just 3.4 percent by 2025, an increase of 140 billion cubic meters from 2021 levels, which is less than the 175 bcm jump in demand registered in 2021 alone.

“The consequences of Russia’s invasion of Ukraine on global gas prices and supply tensions, as well as its repercussions on the longer-term economic outlook, are reshaping the outlook for natural gas,” said the IEA.

HIGHLIGHTS

The IEA chopped its forecast for global gas demand by more than half in its latest quarterly report on gas markets.

It now expects growth of just 3.4 percent by 2025, an increase of 140 billion cubic meters from 2021 levels, which is less than the 175 bcm jump in demand registered in 2021 alone.

“Today’s record prices and supply disruptions are damaging the reputation of natural gas as a reliable and affordable energy source, casting uncertainty on its prospects, particularly in developing countries where it had been expected to play a growing role in meeting rising energy demand and energy transition goals,” it added.

While Russia has cut supplies to Europe and European nations have pledged to wean themselves off Russian gas, the impact quickly rippled throughout the world.

European nations are trying to make up the shortfall by importing more liquefied natural gas shipped by tanker, which the IEA said is creating supply tensions and leading to demand destruction in other markets.

It warned that the scramble for LNG risked not only causing economic harm to other more price sensitive importers, but pushing up prices and thus contributing to additional revenues for Russia.

“In this context, an accelerated phase-out of Russian gas should primarily focus on reducing gas demand and scaling up domestically produced low-carbon gase” such as biogas, biomethane, and green hydrogen, said the IEA.

The IEA, which advises energy importing nations on policy, said in its new forecast for lower gas demand growth that only a fifth of the reduction came from expected efficiency gains and substituting renewables for gas.

“Our forecast’s lower gas demand growth compared to last year does not guarantee an accelerated transition to net-zero emissions, as the bulk of the revision comes from lower gross domestic product and fuel switching rather than by faster gas-to-electricity conversion and efficiency gains,” said the report.

The IEA said additional green energy transition measures would, in additional to their long-term impact in reducing emissions, ease pressure on gas prices globally by reducing supply tensions while also delivering short-term improvements in air quality by quickening the move away from coal.

“The most sustainable response to today’s global energy crisis is stronger efforts and policies to use energy more efficiently and to accelerate clean energy transitions,” Keisuke Sadamori, IEA director for energy markets and security, said in a statement.


Oil slumps $10 per barrel as recession fears darken demand outlook

Oil slumps $10 per barrel as recession fears darken demand outlook
Updated 05 July 2022

Oil slumps $10 per barrel as recession fears darken demand outlook

Oil slumps $10 per barrel as recession fears darken demand outlook

NEW YORK: Oil plummeted by about $10 a barrel on Tuesday on concerns of a looming global recession curtailing demand, even with expected supply disruptions as oil and gas workers in Norway began to strike.

Global benchmark Brent crude was down $10.77, or 9.5 percent, at $102.73 a barrel by 11:43 a.m. EDT (1543 GMT). US West Texas Intermediate crude fell $9.30, or 8.6 percent, to $99.13 a barrel from Friday’s close. There was no WTI settlement on Monday because of a US holiday.

“The market is getting tight, but still we're getting creamed and the only way you can explain that away is fear of recession in every risk asset,” said Robert Yawger, director, energy futures at Mizuho, New York. “You’re feeling the pressure.”

Oil futures sank along with equities, which often serve as demand indicator for crude, as investors fretted about the possibility of an economic downturn as central banks across the world take aggressive actions to limit inflation.

Supply concerns still linger, initially lifting WTI and Brent earlier in the session, due to potential output disruption in Norway, where offshore workers began a strike.

The strike is expected to reduce oil and gas output by 89,000 barrels per day, of which gas output makes up 27,500 bpd, Norwegian producer Equinor has said.

Saudi Arabia, the world’s top oil exporter, raised August crude oil prices for Asian buyers to near record levels amid tight supply and robust demand.

Meanwhile, Russia’s former President Dmitry Medvedev said a reported proposal from Japan to cap the price of Russian oil at about half its current level would mean less oil on the market and could push prices above $300-$400 a barrel.

G7 leaders agreed last week to explore the feasibility of introducing temporary import price caps on Russian fossil fuels, including oil, in an attempt to limit resources to finance Moscow’s “special military operation” in Ukraine.


Oil sector under siege due to underinvestment, says OPEC secretary-general

Oil sector under siege due to underinvestment, says OPEC secretary-general
Updated 06 July 2022

Oil sector under siege due to underinvestment, says OPEC secretary-general

Oil sector under siege due to underinvestment, says OPEC secretary-general

ABUJA: The oil and gas industry is facing huge challenges on multiple fronts and is “under siege” due to years of underinvestment globally that has led to market tightness, Mohammad Barkindo, the OPEC secretary-general,  said on Tuesday.

“Our industry is now facing huge challenges along multiple fronts,” he told delegates at an energy conference in Nigeria’s capital.

“And these threaten our investment potential now and in the long term, to put it bluntly, my dear friends, the oil and gas industry is under siege,” he said, citing geopolitical developments in Europe.

The fallout from the war in Ukraine has left many countries globally vulnerable to soaring energy prices. 

He said the supply shortage could be eased if extra supplies from Iran and Venezuela were allowed to flow.

Years of sanctions have limited supplies from Iran and Venezuela.

In addition, the West has imposed sanctions on Russia, a member of OPEC+ that groups the Organization of the Petroleum Exporting Countries and allies, following Moscow’s invasion of Ukraine on Feb. 24, tightening oil markets further.

“We could, however, unlock resources and strengthen capacity if the oil produced by the Islamic Republic of Iran and Venezuela were allowed to return to the market,” Barkindo said.

Strain on the industry has been increased by some countries' efforts to divest from hydrocarbons, he said.

While they are seeking to limit global warming, he said oil demand was growing even as investment in capacity falls and prices surge.

Nigeria’s Oil Minister Timipre Sylva said Africa’s top oil producer would not abandon fossil fuels.

“For us in Nigeria, fossil fuel will always have a share in our energy mix, for the foreseeable future. We will not at this time abandon fossil fuels. We have adopted ... gas as a transition fuel,” he said.