RIYADH: Building work on Saudi Aramco’s new $7 billion Shaheen petrochemical project in Ulsa, South Korea has officially begun after a groundbreaking ceremony involving the energy giant’s CEO.
Amin Nasser attended the inauguration event alongside South Korea’s president Yoon Suk Yeol and senior officials from both countries.
The Shaheen project, announced in November 2022, is being built by South Korean refiner S-OIL Corp., of which Aramco owns a more than 63 percent stake.
“We are deeply honored by the presence of His Excellency President Yoon at this historic groundbreaking ceremony,” said Nasser – also the Aramco President.
“Shaheen is among Aramco’s biggest international downstream investments, representing a significant and sizeable step forward in our liquids-to-chemicals expansion and another major milestone in further strengthening our presence in Korea,” he continued.
Shaheen is Saudi Aramco’s largest investment in South Korea and is expected to be among the biggest integrated steam crackers – a petrochemical process – in the world.
It is also the first large-scale commercial use of Aramco's thermal crude-to-chemicals technology, which was developed in partnership with Lummus Technology, a leading licensor of proprietary petrochemicals.
The construction of the new plant will be completed by 2026 and will have a production capacity of up to 3.2 million tons per year, in addition to a facility for producing high-value polymers.
Aramco has established a solid relationship with South Korea, and has recently agreed to a $6 billion framework deal with the country’s export-import bank.
According to the deal, Eximbank can lend Saudi Aramco up to $6 billion, which can be used to fund South Korean enterprises involved in projects with the global energy firm, whereas the bank indicated that $1 billion is set aside for hydrogen and renewable energy projects.
Moreover, Aramco also inked a memorandum of understanding with South Korea's Hoban Group last month to collaborate in building and manufacturing.
Bateel International grows culinary portfolio with launch of Bateel Bakery
Updated 09 June 2023
RIYADH: Bateel International has launched a new bakery which will feature food freshly prepared each day on the premises.
The inaugural Bateel Bakery outlet has opened in Waitrose Khalifa City Community Centre, Abu Dhabi, with the first Dubai outlet set to launch this summer in DIFC’s Index Tower.
According to a press release, every item on the menu – from single-origin coffees to organic breads, pastries, salads and sandwiches – is freshly prepared each day by the in-house team of bakers, chefs and baristas.
Caffeine-free options include date seed coffee, made with the roasted seeds of organic dates from Bateel’s own farms in Saudi Arabia.
Customers have the option to dine in the bakery, or order and takeaway directly from the counter.
Ata Atmar, CEO of Bateel International, said: “Bateel Bakery is a truly unique concept which leverages Bateel’s extensive culinary resource and uncompromising commitment to quality with an unprecedented level of convenience.
“This natural step forward is driven by consumer needs and backed by Bateel’s proven success in creating and operating new gourmet experiences.
“We are certain that our existing customers will be delighted with the latest addition to Bateel’s portfolio, and we are excited to share our passion for fine food with a whole new audience.”
UBS, Swiss government agree on Credit Suisse loss guarantee
Updated 09 June 2023
ZURICH: UBS and the Swiss government signed on Friday an agreement to cover up to 9 billion Swiss francs ($10 billion) in losses from its emergency takeover of Credit Suisse, the country’s largest bank, Reuters reported.
The deal comes with various conditions, including a requirement that UBS keeps its headquarters in Switzerland, the government said in a statement.
The loss protection agreement will become effective with the completion of the Credit Suisse takeover, expected as early as June 12, UBS said in a separate statement.
The guarantees will kick in if UBS incurs losses from the sale of Credit Suisse assets beyond 5 billion francs that the lender is due to cover itself.
The state money will not come for free however, with UBS having to pay various set-up and maintenance fees, as well as premiums on any money drawn.
The money was made available by the government to ease the emergency takeover of Credit Suisse, whose collapse risked triggering a global financial crisis.
“To make the takeover possible, the government granted UBS a guarantee for any losses incurred in the liquidation of Credit Suisse assets,” the government said in a statement.
“The guarantee will only come into effect if the losses from the liquidation of these assets exceed 5 billion Swiss francs and is limited to a total of 9 billion francs,” it added.
The agreement will cover a portfolio of Credit Suisse assets that were difficult to assess in the few days the banks had to hash out a deal and which are not needed as part of the future core business of UBS.
The government said the guarantee covered assets with a volume of around 44 billion Swiss francs, an equivalent of about 3 percent of the combined assets of the merged group, mainly made of derivatives, loans, legacy assets and structured products.
Valuations of the losses are expected to be made available during the third quarter of 2023, the government said, while their scale is “highly dependent on the actual wind-down of the assets concerned and market developments” it said.
“Consequently, it is not yet possible to estimate the probability of the guarantee being drawn and the amount involved,” the government said.
The government said its and UBS’s priority was to minimize potential losses and risks to avoid making use of the backstop “to the greatest extent possible.”
UBS said it would manage the assets in a “prudent and diligent manner and intends to minimize any losses and maximize value realization on these assets.”
The government said the agreement did not mention any federal participation in losses above the total agreed 14 billion francs because such a commitment would require “a legal basis as well as parliamentary approval of a corresponding guarantee credit.”
The agreement will remain in place until the final realization of the Credit Suisse assets.
Saudi National Bank’s almost 10 percent shareholding in Credit Suisse will convert to approximately 0.5 percent of UBS following the merger of the two Swiss lenders, a bourse statement said in May.
SNB, Credit Suisse’s top shareholder, said the carrying value of its investment in the troubled Swiss lender was SR1.3 billion ($346.63 million) on March 31, a decline of almost 70 percent during the first quarter.
Both the authorities and UBS are keen to assure the Swiss public that the takeover, orchestrated with the use of emergency laws and backed by public funds, will not become a burden for the taxpayers.
Concerns that the combined bank — with a balance sheet roughly double the size of the Swiss economy — would be too big for Switzerland, led the country’s Social Democrats to propose shrinking UBS assets.
There have also been calls for UBS to keep Credit Suisse’s Swiss operation as a separate entity, to ensure competition and preserve the legacy of the 167-year-old lender.
The loss protection agreement is among the final hurdles UBS needed to clear before it can officially finalize the biggest banking deal since the global financial crisis, possibly next week.
While the emergency takeover was hammered out over one weekend, talks about the exact scope and details of that loss protection had continued for several weeks.
Thai firms eyeing $36m investment in Saudi Arabia as business ties strengthen
Updated 09 June 2023
RIYADH: Thai companies are ready to invest a combined $36 million in Saudi Arabia, a senior figure from the Asian country’s business community has revealed as relations between the two nations continue to develop.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, revealed the figure during a meeting of the Saudi-Thai Business Forum in Riyadh, according to the Saudi Press Agency.
He used his address to the event to remark how 2022 was a “fantastic” year for the Kingdom and Thailand, as it saw the resumption of diplomatic and economic relations and the expectation of several commercial agreements valued at more than $300 million.
Angubolkul added that eight Thai companies are looking to invest the sum in Saudi Arabia, expressing his country’s readiness to cooperate with the Kingdom in the energy and crude-oil storage industry.
The forum, organized by the Federation of Saudi Chambers, came during the official visit of Thailand’s Deputy Prime Minister and Minister of Foreign Affairs Don Pramudwinai to discuss prospects of cooperation between the two countries.
The minister discussed with FSC President Hassan bin Mujib Al-Huwaizi areas of cooperation between the Kingdom and Thailand and ways to expand them.
Delivering a speech at the forum, Al-Huwaizi said Saudi-Thai relations had witnessed considerable developments, including the state visits of the two countries’ leaders, and the establishment of the Saudi-Thai Coordination Council and the Joint Business Council.
Business council Chairman Sami bin Abdullah Al-Obaidi said the Saudi business community is looking forward to establishing investment partnerships with Thailand, especially in light of the promising opportunities available in the two countries.
The forum discussed investment opportunities, the business environment, and formulated a plan to enhance Saudi-Thai economic cooperation.
The volume of trade exchange between Saudi Arabia and Thailand grew by 37 percent in 2022 to reach SR36.8 billion ($9.81 billion).
In November, Auramon Supthaweethum, director general of Thailand’s Department of Trade Negotiations, told Arab News that the country could become Saudi Arabia’s “gateway” to Asian markets following Crown Prince Mohammed bin Salman’s visit to Bangkok as a special guest of the Thai government.
Two nations, one vision: Saudi Arabia and UK celebrate achievements, discuss future collaborations at London forum
Updated 09 June 2023
LONDON: Economic and trade relations between the UK and Saudi Arabia were further cemented in London this week as delegations from the two countries convened to mark the progress of the Kingdom’s Vision 2030 initiative and explore fresh avenues for collaboration.
The UK Saudi Business, Trade and Partnership Forum, hosted at Mansion House in the heart of the City of London by the Saudi British Joint Business Council and the Saudi National Competitiveness Center, drew government officials, business leaders, and experts from both nations.
While acknowledging the accomplishments thus far, Emad Al-Thukair, co-chairman of the Saudi British Joint Business Council, emphasized that the partnership between the two countries has only “scratched the surface.”
“The opportunities are huge,” Al-Thukair told Arab News, adding: “On one hand, the UK seeks more markets, while Saudi Arabia craves technology and opportunities, fostering a wealth of knowledge transfer.
“On the flip side, the UK’s current economic landscape presents abundant opportunities for Saudi funds on the lookout.”
Al-Thukair expressed optimism that the $21.4 billion trade volume figure will multiply significantly over the next two to three years, with opportunities flourishing in both Saudi Arabia and the UK.
In 2022, trade exchanged between the countries experienced a surge of 68 percent compared to the previous year, with the UK’s exports to Saudi Arabia reaching a value of $15.17 billion, while imports from the Kingdom amounted to $6.39 billion.
Discussions at the event revolved around investment opportunities and trade agreements, as well as private sector cooperation in various sectors such as finance, clean energy, education, healthcare, and creative industries.
Speaking to Arab News, UK Minister for Investment Dominic Johnson shared an upbeat perspective on UK-Saudi Arabia business relations, with a special focus on the opportunities in asset management and financial services.
The former entrepreneur argued the UK can bring diverse investment expertise to Saudi Arabia, helping it to branch out from broad-based equity investments into specialized fields like private equity and venture capital.
“I always strive to place my team in the region, as it creates a powerful ripple effect,” said Johnson.
“It brings in individuals with knowledge of various investment types, crucial for transitioning from broad-based equity investments to more specialized, illiquid infrastructure like private equity, venture capital, and the like – all of which will fuel the economy,” he added.
While Johnson acknowledged London’s central role in Saudi Arabia’s financial growth, he expressed his desire to see more Saudi investments spread throughout the UK, particularly the northeast of England.
The UK ambassador to Saudi Arabia Neil Crompton echoed similar sentiments in his opening remarks, saying: “I take great pleasure in witnessing the people-to-people connections in these new development areas.”
He added: “SABIC (Saudi Basic Industries Corp) invested heavily in ICI (Imperial Chemical Industry), alfanar put money into Teesside for clean energy fuel, and Newcastle United, who were struggling 16 months ago, managed to secure a spot in the Champions League this year.
“As a Sunderland supporter is a source of considerable pain to me, but someone once proudly mentioned that the value of their investment has doubled since then.”
Last year, Saudi group alfanar invested $1 billion to launch Lighthouse Green Fuels Energy, the UK’s first company to produce sustainable aviation fuel from waste on a large scale, creating 240 jobs in North England’s Port Clarence site.
In 2021, Saudi petrochemical giant SABIC announced a $1.37 billion investment at its Teesside facility in the northeast of England, targeting decarbonization.
During the event, participants also seized the moment to reflect upon and celebrate the achievements made under the Vision 2030 initiative.
Launched by Crown Prince Mohammed bin Salman in 2016, Vision 2030 is currently at the halfway point of its timeline, working towards revitalizing the Kingdom’s economy and enhancing key sectors such as health, tourism, infrastructure, and education.
Majid Al-Kassabi, Saudi Arabia’s Minister of Commerce, declared to the forum that “today, Saudi Arabia is a different Saudi Arabia,” emphasizing the rapid advancements made towards the Kingdom’s development and transformation agenda.
Al-Kassabi credited the Kingdom’s leadership for the initiative’s success, stating: “It’s not a strategy, it’s all about execution which is the key success factor.”
He added: “Why did we succeed so far? Leadership. Change does not come from the bottom; change has to come from the top. Anybody can steer a ship, but it takes a captain to navigate a course.”
Further private sector participation was also one of the key topics raised during the forum.
Al-Kassabi highlighted that while governmental relations remain strong and continue to foster a thriving business ecosystem, private sector participation is becoming increasingly vital.
To make it easier for foreign private enterprises to enter the Kingdom, Saudi authorities have introduced a range of initiatives, including the Saudi Business Centre, a one-stop-shop offering bureaucratic support to businesses looking to embark on ventures in the Kingdom.
Al-Kassabi encouraged potential investors to visit the Kingdom, assuring them that they would be connected with the right people, government officials, or private sector representatives to explore opportunities based on their interests. “Because seeing is believing,” he added.
Both the Saudi and UK delegations emphasized the importance of visiting Saudi Arabia to truly grasp the vast opportunities available.
Prince Khalid bin Bandar, the Saudi ambassador to the UK, was among several speakers urging British businesspeople who have not yet visited Riyadh to do so.
“Certainly not in my lifetime have I seen anything like what’s happening in Saudi today,” he said, adding: “What we have managed to accomplish in Saudi Arabia over the last seven years is revolutionary.
“You must get there. There are flights every day. Get on one and come and see for yourself.
“It is magnificent what’s happening. It is remarkable. It’s exciting. The energy in the country could power a rocket to the moon.”
Hailed as a triumph by both parties, the forum is expected to pave the way for even more fruitful collaboration between Saudi Arabia and the UK in the years ahead.
During an interview with Arab News, Saudi British Joint Business Council’s CEO Chris Innes-Hopkins praised the atmosphere that filled the room as participants gathered to engage in discussions, celebrate achievements, and explore new possibilities related to Saudi Vision 2030.
Innes-Hopkins highlighted the Council’s ability to foster collaborations between Saudi Arabia and the UK through the organization of network-led events, with a specific focus on emerging sectors such as clean technology and health tech.
He further emphasized the mutually beneficial nature of the Saudi-British relationship, citing the example of Lean Technologies, a successful fintech company that not only found traction in Saudi Arabia but also established an office in London to leverage the talent pool and serve as a gateway to the Middle East market.
Expressing his pride, Innes-Hopkins acknowledged the presence of numerous smaller companies in the audience, recognizing their vital role in forging connections and driving the conversation forward.
“After all, this is what the council is all about. We are not just a chamber of commerce; we are a dynamic business network that connects, inspires, and collaborates for a brighter future,” concluded Innes-Hopkins.
LONDON: Oil prices rose on Friday and were broadly flat on the week as concern over oil demand growth was balanced by Saudi output cuts.
Brent crude futures rose 36 cents, or 0.5 percent, to $76.32 a barrel by 12:32 p.m. Saudi time while US West Texas Intermediate crude was up 34 cents, or 0.5 percent, at $71.63.
Both benchmarks lost about $1 on Thursday, having rebounded from a slump of more than $3 after the US and Iran denied a report by the Middle East Eye that they were close to a nuclear deal that could have brought Iranian barrels back to the market.
Oil prices had risen early in the week, buoyed by Saudi Arabia’s pledge over the weekend to cut output, but pared gains on a rise in US fuel stocks and weak Chinese export data.
“Attention will now shift back to the precarious state of the oil demand picture,” said PVM analyst Stephen Brennock.
Expectations of tighter supply and higher demand as the United States enters the summer holiday season, when more people drive, are being offset by worries over a slow pickup in China’s fuel demand.
Though the Chinese economic recovery has been slower than expected, India — the world’s third-largest oil consumer — has managed to sustain economic momentum.
Strong factory activity helped to lift Indian fuel consumption in May, driving diesel sales to a record high.
Some analysts expect oil prices to rise if the US Federal Reserve skips an interest rate hike at its next meeting over June 13-14.