Cutting cost of carbon capture key to hitting zero emissions goals, climate change conference told

Cutting cost of carbon capture key to hitting zero emissions goals, climate change conference told
The comments were made during a panel discussion at the Middle East and North Africa Climate Week in Riyadh.
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Updated 10 October 2023
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Cutting cost of carbon capture key to hitting zero emissions goals, climate change conference told

Cutting cost of carbon capture key to hitting zero emissions goals, climate change conference told

RIYADH: As Saudi Arabia continues to utilize technology to reduce its climate footprint, direct air capture, coupled with carbon dioxide storage units, is set to play a pivotal role in the Kingdom’s transition, experts say.

During a panel discussion at the Middle East and North Africa Climate Week in Riyadh, Daniel Nathan, chief project development officer at Climeworks, stated there is no point in accomplishing DAC if CO2 cannot be stored. 

“If we use the Kingdom here as the example, we need good storage locations. There are plenty of opportunities. It’s a matter of technology,” Nathan said.

He further explained that the objective extends beyond storage for the sake of DAC. It also serves the broader purpose of conserving resources for the “greater good.”

Nathan highlighted Iceland and the US as examples of good practice in this area, as they are working on constructing sites for new plants to capture air carbon which will be deployed in the coming years.

The panelist also discussed the importance of selecting an appropriate energy source for powering DAC technology and highlighted the preference for using renewable energy sources over fossil fuels.

“Geothermal is an excellent choice. If there is geothermal, it is typically one of the cheaper options. But in this region, in the Kingdom in particular, you are blessed with a lot of sun,” he said.

The panel discussion also underscored challenges surrounding carbon capture technology in difficult-to-abate industries, including refineries, petrochemicals, cement, and steel production.

Krishna Singhania, chief growth officer of Carbon Clean, talked about the “cost challenge” involved with the process, adding: “Traditionally the carbon capture has been very expensive ... with the new generation of the carbon capture technology, we are trying to reduce the cost of carbon capture point source, post-combustion emissions drastically,” said Krishna Singhania, chief growth officer of Carbon Clean.”

He called for the innovation of new technologies to help reduce the size of carbon capture plants, which will assist with the decarbonization of brownfield sites.

Furthermore, Singhania flagged up the time it takes to build carbon capture plants as another challenge facing their development – particularly with the global aim to reach net zero emissions by 2050.

“It’s not going to happen if we are going to take three to five years to build every single carbon capture plant,” he explained, adding: “So we had to come up with very standard sizes, innovative manufacturing ideas, innovative application of our technologies into products to be able to deliver a dozen plants every year.”

The discussion focused on the importance of emission sources in Saudi Arabia and supporting existing infrastructure in the context of transitioning to alternative energy resources.

According to Humam Al-Ghamdi, chief engineer in the Circular Carbon Economy at the Ministry of Energy, the Kingdom wants to make sure that it is leveraging the existing framework for previous sectors that have been already established. 

However, he added that this could have a “severe impact” on areas like aviation, maritime, steel, and cement.

The Riyadh-hosted event, which will take place from Oct. 8 until Oct. 12, will offer the Kingdom a chance to demonstrate how it is spearheading the region’s green transition with programs like the Saudi Green Initiative and the adoption of renewables.


Oman state-run oil firm OQ will make initial public offering and potentially seek billions

Oman state-run oil firm OQ will make initial public offering and potentially seek billions
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Oman state-run oil firm OQ will make initial public offering and potentially seek billions

Oman state-run oil firm OQ will make initial public offering and potentially seek billions

DUBAI: An Omani state-run oil and gas company announced Monday it will make an initial public offering of its exploration and production business, potentially seeking billions in a major move toward privatization in the sultanate.

OQ, formerly known as the Oman Oil Co., follows moves by the Saudi oil giant Aramco and the Abu Dhabi National Oil Co. to seek to raise money through the markets. It also could provide a boost for its local Muscat Stock Exchange.

OQ will offer up to 25 percent of shares in its exploration and production arm, the announcement said. It offered no proposed values for the deal, though Bloomberg quoted anonymous officials with knowledge of the deal suggesting the company could be worth an overall $8 billion, making the stake being put up worth some $2 billion.

“The intention to float OQ Exploration and Production reflects our commitment to unlocking new opportunities for growth, both for the company and for the sultanate of Oman,” OQ CEO Ashraf Hamed Al Mamari said in a statement.

The plan calls for the listing to take place in October, pending regulatory approvals. It plans dividends of $150 million for the first two quarters after that, with a planned dividend of $600 million annually, plus one linked to its performance.

OQ was founded in 2009 and is Oman’s third-largest firm in the oil industry, following the state-owned Petroleum Development Oman and US firm Occidental Petroleum.

Oman, on the eastern edge of the Arabian Peninsula, is a member of the OPEC+ coalition. It produces around 1 million barrels of oil a day and China remains the top client for its crude.

 


Closing Bell: Saudi main index closes in red at 11,962

Closing Bell: Saudi main index closes in red at 11,962
Updated 31 min 46 sec ago
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Closing Bell: Saudi main index closes in red at 11,962

Closing Bell: Saudi main index closes in red at 11,962

RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Monday, losing 19.40 points, or 0.16 percent, to close at 11,962.90.

The total trading turnover of the benchmark index was SR5.75 billion ($1.53 billion), as 113 of the listed stocks advanced, while 109 retreated.

The MSCI Tadawul Index decreased by 0.27 points, or 3.99 percent, to close at 1,490.12.

The Kingdom’s parallel market Nomu slipped, losing 245 points, or 0.95 percent, to close at 25,495.79. This comes as 25 of the listed stocks advanced, while 44 retreated.

The best-performing stock of the day was Saudi Fisheries Co., with its share price surging by 9.90 percent to SR27.75.

Other top performers included Saudi Cable Co., which rose by 8.87 percent to SR81, and and Tourism Enterprise Co., which saw its share price increase 6.74 percent to SR0.95.

The worst performer of the day was Saudi Industrial Export Co., whose share value fell by 9.84 percent to SR2.75.

East Pipes Integrated Co. and Fawaz Abdulaziz Alhokair Co. also saw significant declines, with their shares dropping by 4.24 percent and 3.50 percent to SR140 and SR11.02, respectively.

On the announcement front, Al-Khaleej Training and Education Co. has submitted a request to the Capital Market Authority to increase its capital by issuing 22.65 million new shares to the shareholders of Adhwa’a Al-Hidaya Private Schools Co.

The company will acquire 1.6 million shares, representing 80 percent of Adhwa’a Al-Hidaya’s capital, through this issuance.

AlKhair Capital, as the financial advisor for First Avenue Real Estate Development Co.’s offering, announced a price range of SR5.7 to SR6 per share for its 16.42 million ordinary shares, representing 8.01 percent post-offering. The bidding period for qualified investors will run from Sept. 10 to 16.


Saudi Arabia and GCC drive global sukuk market amid economic diversification push: Moody’s

Saudi Arabia and GCC drive global sukuk market amid economic diversification push: Moody’s
Updated 09 September 2024
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Saudi Arabia and GCC drive global sukuk market amid economic diversification push: Moody’s

Saudi Arabia and GCC drive global sukuk market amid economic diversification push: Moody’s

RIYADH: The global sukuk market is poised for a strong performance in 2024, with issuance volumes expected to surpass those of 2023 despite a slowdown in the year’s second half. 

According to a report by the global credit rating agency Moody’s, the issuance of Shariah-compliant bonds could reach between $200 billion and $210 billion this year, up from just under $200 billion in 2023. 

This growth is being fueled by robust sovereign issuance across the Gulf Cooperation Council and Southeast Asia, with Saudi Arabia playing a leading role.

Economic diversification efforts and the issuance boom 

The GCC region remains strong in the global sukuk market, accounting for a substantial share of the total issuance in 2024. 

In the first half of 2024, GCC sukuk issuance grew 138 percent year on year, reaching $69.2 billion. 

Saudi Arabia led this surge, comprising 37 percent of the total issuance. 

The Kingdom’s efforts to diversify its economy have bolstered investor confidence, making it a key market for the financial instrument. 

In the first half of 2024, the nation issued $17 billion in sukuk, primarily to refinance debt maturing later this year, as well as in 2025, and 2026. 

This pre-financing strategy is expected to continue throughout 2024 as Saudi Arabia accelerates key strategic projects tied to Vision 2030. It also reflects efforts toward economic diversification, a cornerstone of the blueprint that aims to reduce the Kingdom’s dependency on oil revenues.

Abdulla Al-Hammadi, the assistant vice president and an analyst at Moody’s, emphasized Saudi Arabia’s key position in the market, saying: “We expect full-year 2024 sukuk issuance volumes to exceed 2023, supported by strong sovereign issuance across the Gulf Cooperation Council and Southeast Asia, and from Saudi Arabia (A1 positive) and Malaysia (A3 stable) in particular.”

The Kingdom’s borrowing activities align with broader efforts to deepen its capital markets. The government has expanded its borrowing program to build its general reserves and finance major investments. 

This proactive fiscal policy is not just about addressing short-term financing needs; it is designed to maintain a robust presence in global debt markets and ensure steady progress on 2030’s ambitious goals.

Other GCC countries, including the UAE and Qatar, have also experienced significant growth in sukuk issuance. 

The UAE saw its volumes double to $8.6 billion in the first half of 2024, while Qatar witnessed a 258 percent year-on-year increase, reaching $4.57 billion. 

Both nations are implementing economic diversification strategies similar to those of Saudi Arabia, further cementing the region’s dominance in the sukuk market.

Southeast Asia, particularly Malaysia and Indonesia, is a vital region for these bonds. 

Malaysia, with its comprehensive Islamic finance ecosystem, accounted for nearly 30 percent of the total issuance in the first half of the year. 

Indonesian issuance is expected to rise in the latter half of 2024 as the government looks to fund its budget deficit and refinance existing sukuk.

Sustainable sukuk and ESG initiatives

A notable trend in 2024 has been the growing prominence of green and sustainable sukuk. 

These instruments, which align with environmental, social, and governance principles, are increasingly attractive to global investors. 

Saudi Arabia, in particular, has been a driving force behind this trend, issuing significant volumes of ESG-linked sukuk. 

In the first half of the year, issuances in this area reached $6 billion, with Saudi Arabia, the UAE, and Indonesia leading the charge. 

As the global focus on sustainability grows, the Kingdom has taken steps to promote investments in green projects, which is in line with its commitment to environmental stewardship.

Notable issuances include Al Rajhi Bank’s first dollar-denominated sustainable sukuk, valued at $1 billion, and Alinma Bank’s $1 billion additional tier one capital sukuk. 

These reflect Saudi Arabia’s intention to maintain leadership in sustainable finance while encouraging private sector participation in ESG initiatives.

Outlook for 2024 and beyond

Moody’s report highlights that while sukuk issuance is expected to slow in the second half of 2024, the long-term growth prospects for the market remain robust. 

Sovereign issuances from the GCC and Southeast Asia will remain strong, driven by continued efforts to diversify economies away from oil. By the end of the year, sovereign issuances by countries in the bloc, led by Saudi Arabia, could total $100 billion.

The increasing demand for sukuk is not limited to traditional Islamic markets, with investors worldwide are highly interested in these finance products, particularly green and sustainable offerings. 

Al-Hammadi highlighted: “The pool of investors will continue to grow, thanks to the growing popularity of Islamic products beyond core Islamic markets, rising demand for green and sustainable sukuk, and the increasing sophistication and diversity of Islamic instruments.”

Saudi Arabia is well-positioned to benefit from this trend, with its deepening capital markets, a growing reputation as a leader in sustainable finance, and robust economic reform agenda.


Egypt’s trade deficit narrows by 5.1% in June

Egypt’s trade deficit narrows by 5.1% in June
Updated 09 September 2024
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Egypt’s trade deficit narrows by 5.1% in June

Egypt’s trade deficit narrows by 5.1% in June

RIYADH: Egypt’s trade deficit decreased by 5.1 percent in June, reaching $2.87 billion, due to falling prices for wheat and other commodities.

Data from the Central Agency for Public Mobilization and Statistics shows that imports fell by 3.3 percent to $6 billion during the month.

The decline in imports was primarily driven by reduced prices for key commodities: wheat prices dropped by 21.5 percent, medicines and pharmaceutical preparations by 11.9 percent, plastics by 4.2 percent, and corn by 28.6 percent. This follows a 10.3 percent decrease in trade deficit recorded in May, which was also attributed to lower import values.

Since 2004, Egypt has consistently run trade deficits, as import growth has outpaced export growth, largely due to increasing imports of petroleum and wheat, according to Trading Economics.

CAPMAS data also revealed some increases in imports in June compared to the same month in 2023, including a 49.8 percent rise in petroleum products, a 33.6 percent increase in raw materials of iron and steel, a 5.8 percent rise in organic and inorganic chemicals, and a 39.6 percent increase in natural gas.

Export values, however, fell by 1.6 percent year on year to $3.13 billion. This decrease was due to lower prices for commodities such as fertilizers (down 42.9 percent), crude oil (down 64.6 percent), iron rods, bars, angles, and wires (down 23.7 percent), and fresh onions (down 25.4 percent). Conversely, exports of petroleum products increased by 56.3 percent, ready-made clothes by 5.5 percent, fresh fruits by 24.3 percent, and pasta and various food preparations by 12.4 percent.

Egypt aims to revitalize its economy by enhancing exports across diverse global markets. This involves close collaboration between government bodies, the business community, and exporters to improve product quality and competitiveness. The country is targeting $100 billion in annual merchandise exports over the next three years to address its trade deficit.

The International Monetary Fund noted in August that Egypt’s economy is showing signs of recovery, with recent government measures to restore macroeconomic stability starting to yield positive outcomes. Although inflation remains high, it is decreasing.

The IMF’s review highlighted Egypt’s economic reforms, including the unification of official and parallel exchange rates in March, as key to maintaining fiscal stability.


Saudi Arabia’s non-oil exports to Qatar surge 213%: GASTAT 

Saudi Arabia’s non-oil exports to Qatar surge 213%: GASTAT 
Updated 09 September 2024
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Saudi Arabia’s non-oil exports to Qatar surge 213%: GASTAT 

Saudi Arabia’s non-oil exports to Qatar surge 213%: GASTAT 

RIYADH: Saudi Arabia’s non-oil exports to Qatar surged 213 percent in the second quarter of 2024 compared to the previous three months, reaching SR5.79 billion ($1.54 billion), official data showed. 

According to the latest report by the General Authority for Statistics, the surge was driven primarily by shipments of transport equipment and parts, totaling SR4.59 billion.

The Kingdom also exported mechanical appliances and electrical products valued at SR154.4 million to Qatar during the same period, followed by shipments of live animals and related products at SR153.9 million.

This increase underscores Saudi Arabia’s broader economic diversification strategy, which seeks to mitigate the Kingdom’s historical dependence on oil revenues. 

Overall, Saudi non-oil exports grew 4.3 percent in the second quarter from the previous three-month period. The Kingdom also exported prepared food products and beverages worth SR103.8 million to Bahrain, and chemical and allied products valued at SR116.8 million. 

Saudi Arabia’s total outbound shipments to Arab countries reached SR12.15 billion in the second quarter, up 42.94 percent from the previous quarter. 

In terms of imports, Saudi Arabia received SR2.45 billion worth of goods during the same period. 

The UAE remained the top destination for Saudi non-oil exports, receiving SR15.07 billion in the second quarter. Non-oil shipments to China and India were SR7.08 billion and SR5.48 billion, respectively. 

Other notable exports included SR3.13 billion to Singapore, SR2.93 billion to Turkiye, and SR2.40 billion to Belgium. 

Earlier in September another report released by GASTAT noted that non-oil activities in Saudi Arabia witnessed a 4.9 percent year-on-year increase in the second quarter of 2024, driven by expansion of the finance and insurance sectors. 

Compared to the first quarter, non-oil activities rose 2.1 percent. The Kingdom’s seasonally adjusted gross domestic product increased by 1.4 percent quarter on quarter but saw a slight annual decline of 0.3 percent. 

The sharp rise in non-oil exports to Qatar highlights the ongoing success of Saudi Arabia’s economic diversification efforts. 

By boosting trade ties with key regional partners and expanding its non-oil export base, the Kingdom is reinforcing its strategy to build a more resilient and diversified economy, aligning with its Vision 2030 goals.