Rising Gulf demand may curtail oil exports in summer

April 6th, 2008 - 8:03 pm ICT by admin  

(Gulf Business Capsule)

Dubai, April 6 (IANS) Increasing energy demand across the Gulf Cooperation Council (GCC) countries, along with a gas supply crunch, may lead to a fall in oil exports from the region this summer, according to a new report. The report by global financial services firm Lehmann Brothers puts the possible Gulf export shortfall due to high domestic demand at up to one million barrels per day (bpd).

“The Middle East now appears to require more hydrocarbons being devoted to power generation than had been the case historically, as power needs grow,” the Gulf News quoted Lehman Brothers’ chief energy economist Edward Morse as saying.

Last yearm, too, the world market faced a shortage of one million bpd during the period July-August.

“Oil-boom-fuelled economic growth, together with spiralling populations and subsidy-driven consumer patterns, have made the Gulf states some of the largest per capita energy consumers in the world,” Samuel Ciszuk, Middle East energy analyst with Global Insight, told the newspaper.

“Meanwhile, most of the countries have failed to bring sufficient amounts of new gas onstream, leading to a growing use of oil in power generation.”

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Saudi bank to launch country’s biggest IPO

Saudi Arabia’s Alinma Bank has announced the launch of the largest ever initial public offering (IPO) in the country April 7.

The bank plans to raise 10.5 billion Saudi riyals ($2.8 billion) through the sale of 1.05 billion shares April 7-16.

The price has been set at 10 Saudi riyals per share without issuance fees.

“We have employed all IPO experiences seen in the Saudi market so that we may provide the easiest and most convenient way for subscription,” Issa M. Al-Issa, chairman of the board of Samba Capital, the IPO manager, said in a statement

Alinma bank chief executive Abdul Muhsin Al-Faris said he anticipated that the IPO would witness unprecedented demand as banks form the highest promising sector in the country.

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Saudi Arabia to create largest port in Red Sea

Emaar, the Economic City, a subsidiary of the United Arab Emirates (UAE)-based real estate giant Emaar, and global marine terminal operator DP World have signed an agreement to develop and operate a seaport in King Abdullah Economic City (KAEC) in Saudi Arabia.

A multipurpose cargo terminal is scheduled to be operational by the end of 2010 and a 1.6 million twenty-foot equivalent unit (TEU) container terminal by mid-2011.

One of the six key components of the 168 million square metre KAEC, the sea port will be the largest in the Red Sea and one of the top 10 ports in the world with a capacity to handle 20 million TEUs.

In addition to creating 15,000 direct and indirect jobs, the port is expected to contribute an average 10 billion Saudi riyals to the country’s GDP annually, on completion of all phases.

“The SAGIA (Saudi Arabian General Investment Authority) is committed to the kingdom’s vision to make the Saudi economy one of the top 10 competitive economies in the world by the turn of this decade,” SAGIA governor Amr Al-Dabbagh said at the signing ceremony.

“To achieve our goal, we encourage major local, regional and international companies to invest in the infrastructure to augment investment in high-growth strategic sectors, most importantly the transport sector, and thus enhance the competitiveness of these sectors, which contribute to overall economic development.”

He said the KAEC port was the first port in the nation to be completely financed by the private sector.

“We believe that the sea port at KAEC will catalyse regional and international investment to KAEC, and make a substantial contribution to the GDP, in addition to creating direct and indirect job opportunities for the Saudi youth,” Al-Dabbagh added.

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