Saudi Arabia, Pakistan in talks on refinery upgrades, greenfield project: official says 

Special Saudi Arabia, Pakistan in talks on refinery upgrades, greenfield project: official says 
Speaking to Arab News on the sidelines of the World Investment Conference held in Riyadh, Musadik Malik, senator and minister of state for petroleum of Pakistan, noted that the collaboration extends beyond energy projects and includes an agreement to connect power grids between the two nations. File/AN Photo
Short Url
Updated 27 November 2024
Follow

Saudi Arabia, Pakistan in talks on refinery upgrades, greenfield project: official says 

Saudi Arabia, Pakistan in talks on refinery upgrades, greenfield project: official says 

RIYADH: Saudi Arabia is set to deepen its strategic partnership with Pakistan through talks on refinery upgrades and a greenfield project for petroleum products, according to an official. 

Speaking to Arab News on the sidelines of the World Investment Conference held in Riyadh, Musadik Malik, senator and minister of state for petroleum of Pakistan, noted that the collaboration extends beyond energy projects and includes an agreement to connect power grids between the two nations. 

“We are working very closely with the Kingdom to figure out how, what are the future energy needs, particularly in the area of renewables, and jointly, we’re going to identify and scope the opportunity, and jointly we’re going to build a program to fulfill those needs,” Malik said. 

He continued: “We have two different projects which are right now under, to say, research. 

One is the upgradation of quantifier refineries, and the other is a large greenfield refinery which would not only produce petroleum products but also hydrocarbons. These are under research and negotiation, so these are not finalized.”  

Malik highlighted that the partnership goes beyond just securing investments or transferring advanced technology. Instead, it involves a joint effort to carefully analyze Pakistan’s future energy needs and map out potential scenarios for how these demands might evolve over time. 

This forward-looking approach ensures that both nations are not just reacting to immediate energy challenges but are proactively planning for the long term.   

By working together to address these evolving requirements, Saudi Arabia and Pakistan aim to guarantee Pakistan’s energy security, creating a sustainable and reliable framework that supports the country’s growth and development. 

Saudi Arabia and Pakistan are making significant strides in strengthening private-sector collaborations, with multiple agreements already yielding tangible results.  

Malik highlighted the proactive approach both nations are taking to foster business-to-business partnerships. 

“Our prime minister believes that the government should not be in the business of doing business but should facilitate it,” he said, emphasizing the central theme of the collaboration. 

“A very large part of the concept we are jointly building on is the private sector of the Kingdom working with the private sector of Pakistan.”  

The minister added that around $2.8 billion worth of memorandums of understanding have been signed between the two countries in October. 

“Out of these 28 to 30 MOUs, seven or eight have already been converted into contracts and executed within just three to four months,” Malik said.  

He continued, explaining the momentum of the partnership: “We have transacted significant deals, and contracts are in motion. Yesterday (Nov. 25), during a roadshow with the Kingdom’s private sector, we secured a non-disclosure agreement that could pave the way for a $1.8 billion investment.” 

Malik emphasized the multifaceted nature of Saudi Arabia’s involvement in Pakistan, describing it as a “360-degree view” encompassing both public and private sectors. 

“We are not only receiving investments and technology but also collaborating on long-term strategies to meet Pakistan’s growing energy demands,” he said. “The Kingdom’s Public Investment Fund and subsidiaries are actively identifying opportunities for mutual growth.” 

Pakistan is tackling the challenge of energy demand fluctuations, a longstanding issue where consumption peaks in summer and drops to a third during winter. 

This cyclicality forces the country to make capacity payments to investors, covering equity returns and debt servicing even when energy is underutilized, Malik explained. 

To address this inefficiency, Pakistan signed an MoU with Saudi Arabia to connect their power grids. 

“This grid connection will allow energy produced in the Kingdom and Pakistan to be transacted seamlessly,” Malik said. “When we connect with Saudi Arabia, it effectively means connecting with the GCC as well.” 

The initiative also aligns with regional energy strategies, as Pakistan seeks similar arrangements with Central Asian states. 

“In Central Asia, energy demand is high in winter and negligible in summer. With this connectivity, deficits will no longer remain deficits, and surpluses will clear in real-time,” he added, highlighting plans for a unified energy market facilitated by a shared grid. 

Malik concluded the interview by praising Saudi Arabia’s unwavering support for Pakistan, describing the Kingdom as a true and steadfast ally. 

“In good times and bad, we have always found the Kingdom by our side. This is the hallmark of true friendship,” he said. 


Oil Updates – crude rises on upbeat China data, shaky Israel-Lebanon ceasefire

Oil Updates – crude rises on upbeat China data, shaky Israel-Lebanon ceasefire
Updated 37 sec ago
Follow

Oil Updates – crude rises on upbeat China data, shaky Israel-Lebanon ceasefire

Oil Updates – crude rises on upbeat China data, shaky Israel-Lebanon ceasefire

SINGAPORE: Oil prices rose on Monday, supported by strong factory activity in China, the world’s second-largest oil consumer, and heightened tensions in the Middle East as Israel resumed attacks on Lebanon despite a ceasefire agreement.

Brent crude futures climbed 57 cents, or 0.79 percent, to $72.41 a barrel by 10:00 a.m. Saudi time while US West Texas Intermediate crude was at $68.58 a barrel, up 58 cents, or 0.85 percent.

“Oil prices have managed to stabilize into the new week, with the continued expansion in China’s manufacturing activities reflecting some degree of policy success from recent stimulus efforts,” said Yeap Jun Rong, market strategist at IG.

This offered slight relief that oil demand from China may hold for now, he added.

A private-sector survey showed China’s factory activity expanded at the fastest pace in five months in November, boosting Chinese firms’ optimism just as US President-elect Donald Trump ramps up his trade threats.

Still, traders are eyeing developments in Syria, weighing if they could widen tension across the Middle East, Yeap said.

A truce between Israel and Lebanon took effect on Wednesday, but each side accused the other of breaching the ceasefire.

In a statement, the Lebanese health ministry said several people were wounded in two Israeli strikes in south Lebanon. Air strikes also intensified in Syria, as President Bashar Assad vowed to crush insurgents who had swept into the city of Aleppo.

Last week, both benchmarks suffered a weekly decline of more than 3 percent, on easing concerns over supply risks from the Israel-Hezbollah conflict and forecasts of surplus supply in 2025, even as OPEC+ is expected to extend output cuts.

The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, postponed its meeting to Dec. 5 and is discussing delaying its oil output hike due to start in January, OPEC+ sources told Reuters last week.

This week’s meeting will decide policy for the early months of 2025.

“The extension of output cuts would allow OPEC+ more time to assess the impact of Trump’s policy announcements with regards to tariffs and energy and also to see what China’s response will be,” said Tony Sycamore, IG’s Sydney-based market analyst.

Since the group’s production hike had been widely expected, the market’s focus may be on the extent of delay to sway crude prices, said IG’s Yeap, adding: “An indefinite delay may be the best case for oil prices, given that earlier rounds of delays by a month or so have failed to drive higher oil prices in line with what OPEC+ intended.”

Brent is expected to average $74.53 per barrel in 2025 as economic weakness in China clouds the demand picture and ample global supplies outweigh support from an expected delay to a planned OPEC+ output hike, a Reuters monthly oil price poll showed on Friday.

That is the seventh straight downward revision in the 2025 consensus for the global benchmark, which has averaged $80 per barrel so far in 2024.


COP16: Largest-ever UN meeting on desertification starts in Riyadh

COP16: Largest-ever UN meeting on desertification starts in Riyadh
Updated 7 min 41 sec ago
Follow

COP16: Largest-ever UN meeting on desertification starts in Riyadh

COP16: Largest-ever UN meeting on desertification starts in Riyadh

RIYADH: The largest-ever meeting of the UN Convention to Combat Desertification has kicked off in Riyadh, with bolstering global drought resilience one of the key goals.

Running from Dec. 2 to 13, the first few days of COP16 are set to see a number of high-profile summits, ministerial dialogues, and announcements to address the pressing challenges associated with land degradation, degradation and drought. 

French President Emmanuel Macron is expected to be among the attendees, as is the President of the World Bank Ajay Banga. 

The opening day of the event will see Saudi Arabia use its presidency of the event to launch the Riyadh Global Drought Resilience Initiative, in a bid to accelerate international action in this area.

In tandem, the Saudi Green Initiative Forum, running from Dec. 2 to 3, will include hundreds of policymakers, business leaders and subject matter experts from across the world in a dedicated pavilion in the COP16 Green Zone.

The Second International Forum on Greening Technologies is also set to take place in the Green Zone between Dec 6-8, including dozens of tailored sessions to explore solutions, innovations, and lessons learned from global greening projects, alongside showcasing the scientific research associated with restoration projects around the world.

10.43 a.m. - Private sector funding crucial to tackling degradation, UN executive says

Ibrahim Thiaw, executive secretary of the UN Convention to Combat Desertification. UNCCD

Restoring the world’s degraded land and holding back its deserts will require at least $2.6 trillion in investment by the end of the decade, the UN executive overseeing global talks on the issue told Reuters, quantifying the cost for the first time.

More frequent and severe droughts as a result of climate change combined with the food needs of a rising population meant societies were at greater risk of upheaval unless action was taken, Ibrahim Thiaw said.

A large chunk of the around $1 billion a day that is required will need to come from the private sector, said Thiaw, who is executive secretary of the UN Convention to Combat Desertification.

“The bulk of the investments on land restoration in the world is coming from public money. And that is not right. Because essentially the main driver of land degradation in the world is food production... which is in the hands of the private sector,” Thiaw said, adding that as of now it provides only 6 percent of the money needed to rehabilitate damaged land.

“How come that one hand is degrading the land and the other hand has the charge of restoring it and repairing it?,” said Thiaw, whilst acknowledging the responsibility of governments to set and enforce good land-use policies and regulations.

With a growing population meaning that the world needs to produce twice as much food on the same amount of land, private sector investment would be critical, he said.

To hit $2.6 trillion — approaching the annual economic output of France — the world needs to close an annual gap of $278 billion, after just $66 billion was invested in 2022, the UN said.

 

10:36 a.m. - Abdulrahman Abdulmohsen Al-Fadley elected as COP16 president

 


Tripartite deal signed to strengthen Saudi Arabia’s real estate sector

Tripartite deal signed to strengthen Saudi Arabia’s real estate sector
Updated 01 December 2024
Follow

Tripartite deal signed to strengthen Saudi Arabia’s real estate sector

Tripartite deal signed to strengthen Saudi Arabia’s real estate sector

JEDDAH: Saudi Arabia’s real estate sector is poised for significant growth following a new tripartite partnership designed to enhance housing finance and establish a secondary mortgage market.

Under the patronage of Minister of Municipal and Rural Affairs Majid Al-Hogail a memorandum of understanding was signed on Sunday by the Real Estate Development Fund, Saudi Real Estate Refinance Co., and Al-Ahli Bank. The agreement aims to support the Kingdom’s housing sector and accelerate the development of a secondary mortgage market.

The MoU, which involves the Public Investment Fund’s fully owned SRC and Al-Ahli Bank, marks an important step in fostering closer collaboration between financial institutions. As part of the agreement, Al-Ahli Bank will continue to create mortgage portfolios, which will be refinanced through the SRC, according to the Saudi Press Agency.

This partnership is expected to fast-track the creation of mortgage-backed securities (MBS), both domestically and internationally. By doing so, it will help realize the goals of the Kingdom's housing program, promoting the development of a sustainable and integrated real estate financing system. The initiative will also contribute to expanding housing options for Saudi citizens.

Recent data from the Saudi Central Bank shows that banks in Saudi Arabia disbursed SR60.92 billion ($16.24 billion) in residential mortgages during the first nine months of 2024, marking a 4.88 percent increase compared to the same period in 2023. Of this amount, SR38.85 billion was allocated for home purchases, accounting for 64 percent of the total mortgage loans. However, the share of loans for house purchases declined slightly by 3.38 percent year on year, dropping from 69 percent in 2023.

Demand for apartments has surged in response to urbanization and demographic shifts. Apartments now account for 31 percent of all mortgages, up from 25 percent last year, with lending for apartment purchases reaching SR18.6 billion — an increase of 26.8 percent. Loans for land purchases also grew by 8.26 percent to reach SR3.5 billion, underscoring continued interest in land investment across the Kingdom.

The new partnership aims to provide liquidity in the market, ensuring a continuous flow of mortgage financing and supporting the development of the secondary mortgage market in Saudi Arabia.

At the signing ceremony, Al-Hogail also launched a new financing offer from Al-Ahli Bank, with rates starting as low as 2.59% for those interested in purchasing units under construction.

Mansour bin Madi, CEO of the Real Estate Development Fund, emphasized that the strategic partnership with SRC and financial institutions aims to improve the residential mortgage market and reduce financing costs for Saudi families. He highlighted that the initiative aligns with the objectives of the “Sakani” program and the broader real estate goals of Saudi Vision 2030.

Majeed Al-Abduljabbar, CEO of SRC, noted: “This partnership with Al-Ahli Bank is a crucial step in advancing the mortgage financing market in the Kingdom. Through this collaboration, we aim to offer innovative solutions that enhance liquidity, allowing financial institutions to provide mortgage financing tailored to market needs, while expanding property options for citizens.”

Tareq Al-Sadhan, CEO of Al-Ahli Bank, affirmed that the partnership with SRC demonstrates the bank’s commitment to fostering growth in the housing sector and contributing to the development of a dynamic secondary mortgage market. This, he added, will support Saudi Arabia’s broader economic diversification efforts.


Closing Bell: Saudi main index rises to close at 11,741

Closing Bell: Saudi main index rises to close at 11,741
Updated 01 December 2024
Follow

Closing Bell: Saudi main index rises to close at 11,741

Closing Bell: Saudi main index rises to close at 11,741

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 100.43 points, or 0.86 percent, to close at 11,741.74.  

The total trading turnover of the benchmark index was SR4.63 billion ($1.23 billion), as 159 of the stocks advanced and 64 retreated.   

On the other hand, the Kingdom’s parallel market Nomu lost 221.58 points, or 0.73 percent, to close at 30,173.12. This comes as 34 of the listed stocks advanced while 48 retreated.   

The MSCI Tadawul Index gained 11.24 points, or 0.77 percent, to close at 1,471.59.   

The best-performing stock of the day was Gulf Insurance Group, whose share price surged 8.35 percent to SR31.80.  

Other top performers included Saudi Arabian Cooperative Insurance Co., whose share price rose 4.61 percent to SR15.44, and Lazurde Co. for Jewelry, whose share price increased 4.26 percent to SR13.70.

Tamkeen Human Resource Co. recorded the biggest drop, falling 11.34 percent to SR68.

Etihad Etisalat Co. also saw its stock prices fall 3.08 percent to SR53.50.

Meanwhile, Northern Region Cement Co. also saw its stock prices dropping 1.86 percent to SR8.98.

On the announcements front, Nice One Beauty Digital Marketing Co. has announced plans to raise up to SR1.2 billion by offering 30 percent of its shares on the Saudi Stock Exchange.

SNB Capital Co. will act as the offering’s lead manager, financial advisor, book-runner, and underwriter.

EFG Hermes Saudi Arabia will join as joint financial advisors, book-runners, and underwriters. The institutional book-building period will run from Dec. 1 to 8.

According to a Tadawul statement, the price range for the offering has been set between SR32 and SR35 per share. The offering is comprised of 34.650 million ordinary shares, representing 30 percent of the company’s capital after the issuance of new shares and capital increase.

The minimum number of offer shares to be applied for participating parties is 100,000, while the maximum is 5.7 million. The participation in the book-building process is confined to the participating parties in accordance with the Instructions for Book Building Process and Allocation Method in the initial public offering issued by the Capital Market Authority. 

The final price per offer share will be determined after the completion of the book-building process, to be followed by the individual subscriber’s subscription process. The final allocation of the offer shares will be made after the end of the subscription period for individual investors.


Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies

Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies
Updated 01 December 2024
Follow

Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies

Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies

RIYADH: Saudi Arabia’s Council of Economic and Development Affairs reviewed the Kingdom’s economic outlook and strategies to address global challenges, offering recommendations to support growth and resilience.  

In a video conference meeting, the council began by reviewing the quarterly economic report from the Ministry of Economy and Planning, which highlighted key developments in both global and national economies, the Saudi Press Agency reported. 

This follows Saudi Arabia’s 2.8 percent economic growth in the third quarter of 2024, driven by strong performance in non-oil sectors, official data showed.  

The country’s non-oil sector expanded by 4.2 percent year-on-year, in line with Vision 2030’s goal to reduce dependence on oil, according to a recent report from the General Authority for Statistics. 

During the meeting, the council reviewed the Ministry of Finance’s third-quarter report on the performance of the state’s general budget for fiscal year 2024. The report provided a breakdown of financial performance through the third quarter, including indicators for revenues, expenditures, and public debt. 

The findings confirm the Kingdom’s ongoing support for development projects, its strengthening of social care and protection systems, and its commitment to implementing major initiatives under Vision 2030. 

The Ministry of Commerce also presented a report from the Permanent Committee for Price Monitoring during the third quarter of 2024, outlining the roles and tasks of the committee's participants. 

The report highlighted key developments, including global price trends, consumption patterns, and inflation indicators in the Kingdom. It also detailed consumer goods prices for the third quarter and the measures taken to ensure the availability of goods and maintain price stability. 

The meeting also covered several other topics and reports, including the National Export Strategy Project, the National Savings Strategy, and initiatives related to financial inclusion and education. 

Additionally, the council reviewed the third-quarter 2024 Real Estate Price Index, the executive summary of foreign trade for August 2024, the September 2024 Consumer Price Index report, and the Wholesale Price Index report for the same period. 

The meeting concluded with the council making necessary decisions and recommendations on all discussed matters. The council’s recommendations and decisions are set to guide the country’s economic trajectory in the coming months.