Opec strategy pays off
10 January, 2018 | By RICHARD THOMPSON
A series of events in the final weeks of 2017 provide a strong indication of what we can expect in the year ahead.
From an economic perspective, the most significant was the 30 November agreement between Opec and non-Opec oil producers to extend the oil production cap to the end of 2018. The move aims to rebalance global oil supply and demand, and remove damaging volatility in the energy markets.
The strategy is working. Oil prices are climbing and the improved outlook gives a degree of fiscal flexibility that will help governments to push ahead with difficult economic reforms.
An initial public offering (IPO) of shares in the fuel distribution arm of Abu Dhabi National Oil Company in December was the first of several listings planned in the region. This will be followed in 2018 by the Saudi Aramco IPO, which could be the biggest share sale in history. These sales pave the way for the more challenging privatisation of the region’s utilities and other state entities.
There is huge investor appetite to buy into the region’s prime assets, and as well as delivering substantial windfalls to governments, the privatisations will have a transformational effect on the region.
Set against this is rising political risk. The ongoing Qatar crisis, the anti-corruption arrests in Saudi Arabia and the missiles fired at the GCC from Yemen, all in December, could undermine investor confidence.
The coming year will continue to deliver shocks. But companies must not lose sight of the powerful, long-term fundamentals driving the region – a fast-growing, young population, an expanding middle class, ambitious and well-funded diversification programmes, and the world’s most abundant energy supplies.
Related Posts
Coronavirus outbreak accelerates digital transformation, but also provides a stress-test for financial institutions
Click here to download MEED’s Covid-19 retail banking sector analysis
Covid-19 and the accompanying period of economic paralysis is leaving ...
READ MORE
While the Covid-19 crisis and drop in oil prices have led to a collapse in government revenue and short-term project spending, regional project plans remain in place
The combination of the ...
READ MORE
Egypt is one of the most populous countries in the GCCE, with a growing economy.
Combined with factors such as increasing life expectancy, growing prevalence of non-communicable diseases (NCD) and a ...
READ MORE
There are more than $155bn of residential and mixed-use schemes still on hold
The decision by Bahrain’s Judicial Committee for the Settlement of Stalled Real Estate Projects plans to auction the ...
READ MORE
Tough times lie ahead for the market as projects are put on hold and developers are forced to lay off staff
Dubai has propped up the UAE’s construction market in recent ...
READ MORE
New strategy has been deployed for the development of the Belbazem oil field
Abu Dhabi has started using a new strategy for dealing with contractors, as it looks to save money ...
READ MORE
Emirate was finalising the location for its third major solar scheme earlier this year
Abu Dhabi’s state utility Emirates Water & Electricity Company (Ewec) could issue the transaction advisory tender for the ...
READ MORE
Dubai and Abu Dhabi are taking leading roles as countries start to emerge from lockdowns
The second half of 2020 will be crucial for the global economy as countries begin to ...
READ MORE
Catalysed by the Covid-19 pandemic, the healthcare sector in the GCC and wider region is witnessing a change in the way services are delivered.
From regulation to insurance provisions, through to taking ...
READ MORE
The third Mashreq Energy Club focused on the rise of renewables in the region
The falling costs of clean energy technologies is driving the shift towards renewable energy across the Middle ...
READ MORE
Retail banking faces severe trial under Covid-19
Project opportunities to watch out for
Healthcare market assessment of Egypt
Stalled real estate projects are still an issue
Dubai construction stalls as contract awards slow
Abu Dhabi looks to new contracting model for
Abu Dhabi to make next solar move
UAE leads as global economy restarts
GCCE Healthcare Industry Report 2022
ENERGY CLUB 3: Renewables on the rise in
10 January, 2018 | .By RICHARD THOMPSON
