meed-logo

line1 line2 line3
SIGN IN / REGISTER

Cooperation strengthens Gulf markets

21 November 2024

 

The message was loud and clear at the second Gateway Gulf investment forum hosted by the Bahrain Economic Development Board (Bahrain EDB) in Manama in early November. Regional integration will be crucial to the GCC’s ongoing economic success story.

The comments by ministerial speakers and business leaders at the event underscored how the GCC has grown closer both politically and economically since the signing of the Al-Ula declaration in 2021, which effectively ended the Qatar diplomatic dispute that began in 2017, and kickstarted a new era of regional cooperation. 

The drive to bind the GCC as a more integrated economic bloc contrasts sharply with the political backdrop of the first Gateway Gulf. That event in May 2018 started the day President Donald Trump withdrew the US from the Joint Cooperative Plan of Action, better known as the Iran nuclear deal, and was set amid the GCC’s diplomatic dispute with Qatar.

Closer ties

The political backdrop is very different in 2024; the six GCC states enjoy warm relations, and tensions with Iran have cooled following a series of diplomatic rapprochements involving Tehran, Riyadh and Abu Dhabi. 

These diplomatic efforts have resulted in a more stable business environment that has produced robust economic growth, record levels of inward investment and record spending on projects. 

“As with every great moment in history, our region’s progress depends on continued unity and collaboration with current geopolitical complexities. A unified GCC can serve as a stabilising force shaping not only our own future but influencing the future,” said Bahrain’s Finance & National Economy Minister, Sheikh Salman Bin Khalifa Al-Khalifa, during his opening address at Gateway Gulf. 

The stability that the Gulf offers has enhanced its appeal to investors at a time of war and instability in other areas. 

“We have become one of the most promising destinations, not only for those looking to raise capital, but also for those looking to deploy it,” said Sheikh Salman. “Dynamic transformation is sweeping across the region.”

Saudi Arabia’s Investment Minister Khalid Al-Falih also highlighted how the GCC has managed to prosper while other regions struggle with challenges. “GCC countries come out of these tensions stronger. We know how to navigate unfortunate difficulties. We’ve seen it over many, many decades … and if you look at the numbers, our credit ratings are going up, our stock markets are strong, unemployment is coming down across the region,” he said.

Regional integration will be crucial to the GCC’s ongoing economic success story

Attracting investment

Investment funds also play a key role in the region’s success. “The GCC also has [Saudi Arabia’s Public Investment Fund] the PIF and the Emirati, Qatari and Kuwaiti funds that are all well-capitalised sovereign funds that can co-invest with global investors,” said Al-Falih. 

Over the past year, some of the world’s leading investment companies have formed joint ventures with the GCC’s sovereign wealth funds. 

In November, US-based Apollo and Abu Dhabi’s Mubadala Investment Company extended their multibillion-dollar partnership, initially formed in 2022, to capitalise on global private debt and equity opportunities. This extension enhances Apollo’s Capital Solutions division, supporting large-scale investment origination to meet rising demand for private financing. 

The partnership aligns with Apollo’s goal to reach $275bn in annual originations, with a focus on sectors like clean energy and digital infrastructure.

In April 2024, BlackRock and the PIF agreed to establish BlackRock Riyadh Investment Management, a multi-asset investment firm based in Riyadh. The venture began with an anchor investment of up to $5bn from the PIF, aiming to accelerate the growth of Saudi Arabia’s capital markets by supporting foreign institutional investment.

Al-Falih also highlighted changes in how sovereign wealth funds that traditionally used to invest overseas to offset volatility in the oil markets are increasingly looking to domestic investment within the GCC. 

“We are investing globally, but quite frankly, when we look around the world, we can’t find a better location to invest than within the region and in our own economies, which are transitioning,” he said. 

Sheikh Salman echoed Al-Falih’s comments. “I chair Mumtalakat, [Bahrain’s] sovereign wealth fund, and we look at where we deploy capital. What we have found is that the most compelling investment opportunities, with the highest return on equity, are increasingly at home or in the region. 

“Mumtalakat has in effect turned itself into the joint venture partner of choice for inward investment because it provides a higher return on equity versus other investments in other places,” he said.

Many of those investments have involved infrastructure, with notable transactions in oil infrastructure, the power and water sector and real estate. 

An example came in September, when Bahrain’s state-owned Bapco Energies sold a stake in the Saudi Bahrain Pipeline Company (SBPC) to a fund managed by BlackRock. SBPC owns a portion of the 112-kilometre pipeline supplying crude oil from Saudi Aramco to Bahrain’s Sitra refinery.


Sheikh Salman and Saudi Investment Minister Khalid Al-Falih met at Gateway Gulf 2024. Credit: Bahrain News Agency

Another emerging trend could be cross-border mergers and acquisitions across the GCC. Over the past decade, there has been a steady stream of consolidation as companies combine their operations. This has remained within national borders and typically involved government or government-related entities. 

Abu Dhabi, in particular, has been a hotbed for consolidation involving companies in a variety of sectors, including banking, hydrocarbons, industry, real estate and construction. 

The new trend is for companies to merge with other players outside their national boundaries, but within the GCC. Also at Gateway Gulf, Aluminium Bahrain (Alba) chairman Khalid Al-Rumaihi provided an update and insight into the proposed merger of Alba with the aluminium business of Saudi Arabian Mining Company (Maaden). 

The pioneering transaction could pave the way for further consolidation across the region. Al-Rumaihi emphasised that private sector deals need to make business sense when asked about the impact of the deal on future transactions. 

“When we talk about integration in the GCC, the private sector should lead, and we hope that others will look at this [transaction] and explore opportunities. It could happen in banking, it could happen in other industries, but I think it could accelerate, and it needs the transaction to make sense,” he said.

The GCC’s projected growth will provide plenty of opportunities for everyone

Promoting collaboration

As cooperation across the GCC intensifies, seasoned Gulf watchers will be reminded that the region has been through periods of accelerated integration, only to have those efforts dashed due to internal disputes and greater protectionism introduced during economic downturns. The most cited historical example is the single currency project pursued in the early 2000s, which was reportedly aborted after governments could not decide where to locate the GCC Central Bank.

At the same time, other regional projects, such as the GCC rail scheme, had failed to make substantial progress.   

Speaking at Gateway Gulf, Bahrain’s Industry & Commerce Minister Abdulla Bin Adel Fakhro said that the GCC has evolved. He explained that in the past, the GCC countries produced oil and exported it out of the region, which gave little economic incentive for cooperation. Today, economies are more diversified and trade with one another enhances cross-border collaboration.  

Collaboration is already visible in the projects market. There are schemes to connect the electricity grids of the UAE with Saudi Arabia and Oman, and the once dormant GCC rail project is advancing, with progress being made on rail projects in all six GCC states. 

Growth also supports integration. Sheikh Salman said that the GCC’s projected growth will provide plenty of opportunities for everyone. 

“The GDP of the Gulf countries is approximately $2.3tn. Over 50% of that is in Saudi Arabia and over 25% is in the UAE. That $2.3tn is conservatively going to reach $3tn of GDP by 2030 and $6tn of GDP by 2050,” said Sheikh Salman. 

“That in and of itself is the single biggest opportunity for any other GCC country – to ensure that they are providing the services, providing the growth engine, providing any sort of services to [support] that growth.”

On a similar note, Al-Falih explained that what is good for one GCC country will ultimately benefit all. “If it is good for Bahrain, it is good for Saudi Arabia, and what is good for Saudi Arabia is good for the rest of the GCC. It is the old adage that a rising tide lifts all boats.” 

https://image.digitalinsightresearch.in/uploads/NewsArticle/12965411/main.gif
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Aldar acquires Dubai Studio City development

    14 May 2026

    Abu Dhabi-based developer Aldar has acquired a residential and community retail development in Dubai Studio City from Dubai-based developer SRG for AED1.1bn ($300m).

    The deal is part of Aldar’s long-term strategy to build a high-quality, recurring-income portfolio and to scale its presence in the city.

    Scheduled for delivery in 2028, the project comprises six mid-rise buildings with 312 homes, including one-, two- and three-bedroom apartments and duplexes. It also includes a community mall with retail, leisure and food-and-beverage offerings, as well as a 16,000-square-metre park.

    “Dubai is a priority growth market for Aldar, and this acquisition reflects our belief in the city’s residential market and the central role that institutionally owned, professionally managed rental housing plays in meeting the needs of a growing population,” said Jassem Saleh Busaibe, CEO of Aldar Investment. 

    “Dubai Studio City’s established infrastructure, vibrant community and strong connectivity make it an excellent location for a high-quality, professionally managed living environment. This transaction is the latest step in a deliberate and broadening strategy to build a diversified portfolio of income-generating assets in Dubai, one that we expect to continue growing as the city attracts increasing global interest and talent,” he added. 

    The transaction expands Aldar’s activities in Dubai across a range of property types. Aldar Investment’s recurring-income portfolio in the emirate now includes residential, commercial, logistics and mixed-use assets. Key holdings include a mixed-use joint venture with Expo City Dubai, a signature office tower in Dubai International Financial Centre, a Grade A office building on Sheikh Zayed Road, and logistics facilities in National Industries Park and Dubai South.

    On the development front, Aldar’s partnership with Dubai Holding continues to gain traction, with three master-planned residential communities already launched and a pipeline exceeding 2.3 million sq m of new gross floor area. 

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16832033/main.jpg
    Colin Foreman
  • Algeria awards major gas project contract

    14 May 2026

     

    The Chinese-Algerian joint venture Groupement Sonatrach-Sinopec (GSS) has provisionally awarded a major contract to upgrade the gas lift compression unit at Algeria’s Zarzaitine field.

    The $238.8m contract has been awarded to a consortium of the Chinese companies Tianchen Engineering Corporation and Shaanxi Yanchang Petroleum.

    The client on the project is a partnership between Beijing-headquartered Sinopec and Algeria’s state-owned oil and gas company Sonatrach.

    The contract uses the engineering, procurement, construction and commissioning (EPCC) model and has a 45-month term.

    The gas lift unit was first installed in 1988. It processes and injects gas into the field to help boost oil production at the Zarzaitine oil field.

    Under the terms of the contract, the unit will be upgraded to boost its performance.

    Its functions include gas separation, filtration, compression and condensate recovery.

    The latest contract award comes at a time when Sonatrach is taking advantage of concerns about global gas and crude supplies to sign deals and push ahead with major upstream projects.

    In recent weeks, the country has launched an oil and gas licensing round, taken steps to boost crude production in the short term and awarded a $1.1bn oil and gas field development project.

    This comes as shipping remains disrupted through the Strait of Hormuz, a key global oil and gas supply route. The disruption began after the US and Israel attacked Iran on 28 February 2026, triggering a regional war.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16822685/main.jpg
    Wil Crisp
  • Kuwait continues to deploy oil drilling rigs

    14 May 2026

    Kuwait is continuing to deploy oil drilling rigs despite the ongoing crisis disrupting shipping through the Strait of Hormuz, according to a statement from Kuwaiti drilling and oilfield services provider Action Energy Company (AEC).

    In a statement released on 13 May, the company’s chief executive, Ahmad Mohammad Al-Ajlan, said it had secured awards for an additional seven rigs announced in January 2026, before the US and Israel’s 28 February attack on Iran.

    He added that deployment of these rigs was “progressing in line with schedule”.

    The ongoing deployment of the rigs comes amid significant disruption to Kuwait’s oil and gas sector.

    Kuwait’s oil and gas sector has been severely impacted by the blockade of the Strait of Hormuz, through which all of its crude exports are normally shipped.

    The country recorded zero crude oil exports in April for the first time since the end of the Gulf War in 1991, according to shipping monitor TankerTrackers.com.

    The inability to export crude has quickly filled domestic storage capacity, forcing production cuts at the country’s largest oil fields.

    Rising revenues

    Despite the ongoing crisis, AEC has reported positive financial results for the first quarter of this year, which ended on 31 March.

    The company’s revenue grew by 69.2% year-on-year, primarily driven by the expansion of the operating rig fleet from 13 rigs in the first quarter of 2025 to 20 rigs in the first quarter of 2026, including the full-quarter contribution of 10 new rigs deployed during 2025.

    The company is benefitting from a substantial multi-year contracted backlog with the state-owned upstream operator, Kuwait Oil Company (KOC).

    Sheikh Mubarak Abdullah Al-Mubarak Al-Sabah, the chairman of AEC, said: “Despite regional disturbances during the period, AEC delivered performance in line with expectations, ensured uninterrupted support to KOC operations, and continued to operate with safety as a core value.”

    In January 2026, AEC announced two contract awards from KOC.

    The first contract, worth KD4.8m ($15.6m), covers two 750-horsepower (HP) rigs, which are expected to be deployed in the second half of the year.

    The second contract, worth KD62.1m ($201.5m), covers four 1,500 HP rigs and one 1,000 HP rig.

    These are expected to start operations from the fourth quarter of 2026 and the first quarter of 2027.

    Together, these awards bring the company’s rig fleet backlog to 27 rigs once fully mobilised, according to AEC.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16822649/main5931.jpg
    Wil Crisp
  • Aramco aims to raise $10bn with real estate deal

    14 May 2026

    Saudi Aramco is considering plans to generate more than $10bn by leveraging its real estate assets, which include its headquarters and campus in the kingdom’s Eastern Province. The move could involve a sale-and-leaseback structure, which would provide the oil giant with a significant influx of capital while allowing it to retain use of the properties.

    According to Bloomberg, Aramco is working with advisers to facilitate the transaction, which is expected to attract interest from major infrastructure and real estate investment funds. The initiative follows an $11bn lease agreement signed last year with a group led by BlackRock for facilities supporting the Jafurah gas project.

    Aramco is also reportedly pursuing deals involving its gas-fired power plants, water infrastructure, and stakes in oil export and storage terminals.

    These efforts to unlock capital come as the firm supports the kingdom’s economic transformation under Vision 2030 amid rising costs and regional conflict.

    Aramco reported $12bn of capital expenditure in the first quarter of this year, which it said supports its growth objectives. It previously guided for capex of $50bn to $55bn for the full year.

    Aramco’s capex in Q1 2026 was down 4% from the same period last year. The company spent $13.37bn in Q4 2025 and $52.2bn for the full year.

    Offshore oil and gas projects are understood to have accounted for a significant share of Aramco’s first-quarter capex.

    The company reported a sharp rise in profit in Q1 2026, beating analyst expectations as higher oil prices and increased crude sales offset geopolitical disruptions linked to shipping constraints in the Strait of Hormuz.

    Aramco’s adjusted net income rose nearly 26% to $33.6bn in Q1 2026, from $26.6bn a year earlier.

    Net income rose more than 25% year-on-year to $32.04bn, compared with $25.51bn in Q1 2025, driven by higher crude oil prices and increased sales volumes.

    Revenue increased 7% to $115.49bn, supported by higher prices for crude oil, refined products and chemicals, as well as higher sales volumes of crude and chemical products.

    On a quarterly basis, net income jumped 72.9% from Q4 2025, rising from $18.53bn to $32.04bn, helped by stronger margins and lower operating costs despite higher taxes and zakat payments.

    Cash flow from operating activities totalled $30.7bn, while free cash flow came in at $18.6bn, down slightly from $19.2bn a year earlier. This reflected a strategic $15.8bn increase in working capital aimed at ensuring business continuity.

    READ THE MAY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Global energy sector forced to recalibrate; Conflict hits debt issuance and listings activity; UAE’s non-oil sector faces unclear recovery period amid disruption.

    Distributed to senior decision-makers in the region and around the world, the May 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/16821588/main.gif
    Colin Foreman
  • GCCIA appoints contractor for Saudi substation expansion

    14 May 2026

    France-headquartered Cegelec has won an engineering, procurement and construction (EPC) contract to expand the Salwa 400kV substation in Saudi Arabia.

    The project is being developed under the Gulf Cooperation Council Interconnection Authority (GCCIA) with local firm Ekbart Engineering Company (EECC) serving as the civil sub-contractor.

    The GCCIA previously awarded a contract to Omexom for the construction of a 400kV overhead transmission line linking the Salwa substation with the Al-Silaa substation in Abu Dhabi.

    Cegelec and Omexom are both engineering subsidiaries of France’s Vinci Energies, part of the wider Vinci Group.

    The wider $230m project involves the construction of a 96-kilometre, double-circuit 400kV overhead line, the expansion of three key substations in Gonan, Al-Silaa and Salwa, and the installation of upgraded 400kV switchgear, circuit breakers and reactors.

    As MEED previously reported, the project is being financed by the Abu Dhabi Fund for Development, which signed a $205m financing agreement with the GCCIA last July.

    France’s EDF is acting as the main consultant on the project.

    The interconnection is intended to strengthen power grid connectivity between the UAE and Saudi Arabia. It forms part of wider GCC grid expansion plans, including the $700m Oman power grid interconnection, which began implementation in February.

    This project marks one of the largest expansions in the authority’s history and involves building a 400kV double-circuit transmission line extending about 530km between the two countries.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16818074/main.jpg
    Mark Dowdall