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
New downloadable report from MEED, in partnership with Mashreq, examines how the region’s oil producers are responding to changing energy demand.
The fundamentals of future energy demand look good for Middle East oil ...
READ MORE
The energy sector lender says total spending in the Middle East and North Africa will be $792bn
Energy sector lender Arab Petroleum Investment Corporation (Apicorp) has predicted that total committed and ...
READ MORE
As oil production cuts boost confidence in the energy sector, Abu Dhabi National Oil Company (Adnoc) is pushing ahead with bullish plans to expand its refining capabilities, add value to ...
READ MORE
State oil company targeting five offshore and three onshore fields for high-sulphur gas capacity expansions
Abu Dhabi National Oil Company (Adnoc) is considering the investment of $20bn in developing sour gas ...
READ MORE
Project is estimated to be worth $15bn
The bid submission deadline for companies to bid for the design contract for Abu Dhabi’s Hail and Ghasha Sour Gas Development has been pushed ...
READ MORE
The two energy majors will jointly explore opportunities to reduce CO2 emissions, improve energy efficiency, and use renewable energy for oil and gas operations
Abu Dhabi National Oil Company (Adnoc) has ...
READ MORE
The national oil companies are ramping up crude production as they push for increased market share
Oil prices have been on free fall since the collapse of the three-year-plus cooperation mechanism between ...
READ MORE
Project has stalled since Shell pulled out in 2016
Abu Dhabi National Oil Company’s (Adnoc's) $10bn Bab sour gas project is seeing progress, according to the company’s chief economist Kamel Ben ...
READ MORE
Oil and gas companies around the region are investing in petrochemicals to maximise the value obtained from every barrel of crude oil produced
A report published in October 2018 by the International ...
READ MORE
State oil giant Adnoc announces details of four onshore and two offshore blocks in which it will hold majority 60 per cent stake
The Abu Dhabi National Oil Company (Adnoc) has ...
READ MORE
The Future of Middle East Energy
Apicorp predicts regional energy investment slump
Adnoc eyes diversified growth
Abu Dhabi considering $20bn investment in offshore sour
Deadline extended for UAE sour gas development
Adnoc and Total sign decarbonisation agreement
Aramco and Adnoc dominate oil market
Adnoc says its $10bn Bab sour gas project
ENERGY ROUNDTABLE: Outlook for petrochemical investments in the
Abu Dhabi offers six oil and gas blocks
10 January, 2018 | .By RICHARD THOMPSON