Here is a selection of Arab banking news stories that we have been following recently. Bank M&A in the Gulf, Blom's successful capital increase and the British government's second sovereign sukuk.
Major Middle East Energy Projects Continue, Despite Low Oil Prices
- 10th, May, 2016
$289 billion has been committed to energy projects in the Middle East that are already under execution, with an additional $611 billion planned for investment, according to a new report by Apicorp Energy Research.
Saudi Arabia and Iran will account for the lion’s share of these investments, Apicorp says, although Egypt will also be investing heavily in its power sector.
Apicorp classifies investments as either ‘Planned’, meaning that they are under study, are waiting for the Front End Engineering and Design (FEED) contract or are on the point of seeing contracts awarded. This category also includes projects that have been officially announced. 'Committed' investments are those that are already being implemented, with contracts signed. Apicorp's horizon for including projects is five years.
Within 'Planned' investments, the power sector accounts for $194 billion, the oil sector $190 billion and the gas sector $149 billion. About half of these are still under study, and Apicorp does not expect all of them to be implemented, due to the current uncertain economic outlook in the Middle East. However, $117 billion of projects are already in the bidding stage, with another $66 billion in the design phase.
Saudi projects account for $102 billion of the total 'Planned' investments, of which the Hasbah gas field expansion and the Taiba power project are among the biggest. Iran accounts for $71 billion, including the $8.5 billion Iran Gas Trunkline (taking gas to Europe via Turkey) and the $4.5 billion Kish gas development.
In Egypt, power projects are expected to account for 75% of the $60 billion in planned investments, although the recently-discovered Al-Zoh gas field will require final investment of about $12 billion, Apicorp says.
As for 'Committed' investments of $289 billion, Saudi Arabia accounts for $53 billion, much of it in the power sector. Iraq has the second largest volume of 'Committed' projects, $47 billion, including the Subair and Halfaya upstream oil development projects (led by ENI and PetroChina, respectively).
More details can be seen in the report itself, which runs to five pages, and is attached below.
Largest MENA Energy Projects over the next five years
1. IGAT Gas Trunkline, Iran, with a budget of $18.9 billion, due for completion in 2019
2. South Gas Utilisation Projects, Iraq, with a budget of $17.2 billion, due for completion in 2018
3. Clean fuels projects (oil), Kuwait, with a budget of $16.3 billion, due for completion in 2018
4. Upper Zakum Full Field Development (upsteam oil), UAE, with a budget of $16.2 billion, due for completion in 2016.
5. Khazzan & Makarem Fields Development (gas), Oman, with a budget of $16 billion, due for completion in 2016
6. Jizan Refinery and Power Project (oil/ower), Saudi Arabia, with a budget of $16 billion, due for completion in 2016.
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