Gaza conflict puts region on edge again
26 December 2023
For much of 2023, the defining narrative for the Middle East was one of reconciliation. From Iran and Saudi Arabia agreeing to rekindle diplomatic relations under a China-brokered deal in March, and Syria’s President Bashar al-Assad being welcomed to an Arab League summit in Riyadh in May, leaders favoured diplomacy over division.
Not all wounds healed, but even in Yemen an unofficial truce between Houthi rebels and Saudi-backed forces largely held throughout the year.
The Hamas assault on Israel on 7 October and Israel’s response dramatically altered the picture, although whether it will lead to lasting regional change remains to be seen.
Prior to the fighting, few minds in the region were focused on the Palestinian issue, with far more attention being paid to developing commercial and security ties. Saudi Arabia was widely thought to be edging closer to normalisation with Israel, with Israeli ministers starting to visit the kingdom regularly.
Israel’s Communications Minister Shlomo Karhi was in Riyadh on 1 October for a conference. Tourism Minister Haim Katz visited for a World Tourism Organisation event a week earlier.
Such trips are now off the agenda, with Riyadh focused on leading the Islamic world in condemning Israel. On 11 November, it hosted a joint summit of the Arab League and the Organisation of Islamic Cooperation. Among the attendees was Iran’s President Ebrahim Raisi – the first visit by an Iranian president to Saudi Arabia since 2012. Raisi used the occasion to invite Crown Prince Mohammed bin Salman al-Saud to visit Tehran, a sign that the pre-war trend for reconciliatory diplomacy has not entirely disappeared.
The Gaza conflict has been particularly difficult to navigate for Abraham Accord signatories Bahrain, Morocco and the UAE. Bahrain suspended economic ties with Israel, but there has been no sign from any of the three of wanting to break off relations altogether.
“How far the war goes will determine how the relationship [with Israel] develops,” said one analyst.
Some other diplomatic gains are also being made against the backdrop of the war. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani travelled to Manama on 17 November as part of an energetic diplomatic push to bring the Israeli/Palestinian war to an end.
Sheikh Mohammed held talks with Prime Minister and Crown Prince Salman bin Hamad al-Khalifa, and they agreed to revive long-abandoned plans to build a ‘friendship bridge’ between the countries.
Navigating the multi-polar world will remain a key challenge for Gulf powers in the year ahead
Another trend evident in recent years has also continued – namely the efforts by some Gulf powers to dilute their ties with Western allies and build stronger links with China, Russia and others.
A clear sign of this came in August when the UAE and Saudi Arabia were invited to join the Brics grouping of major non-Western economies. They are set to formally join in January.
But in an indication of their desire to maintain links with all sides, Saudi Arabia and the UAE then signed up to the India-Middle East-Europe Economic Corridor (Imec) initiative at the G20 summit in New Delhi, India, in mid-September.
Navigating the increasingly multi-polar world will remain a key challenge for Gulf powers in the year ahead.
Imminent peril
In other parts of the region, the situation holds more immediate peril. In Egypt, the economy is in a parlous state, with President Abdul Fattah al-Sisi relying on Gulf allies to prop up an economy facing over $29bn of debt repayments in 2024.
Neighbouring Libya remains divided between rival administrations with their own regional allies. Turkiye and Qatar have supported the Tripoli-based government of Prime Minister Abdulhamid al-Dbeibah, while Egypt, Saudi Arabia and the UAE back General Khalifa Haftar and his Libyan National Army in the east.
In Sudan, the UAE-backed Rapid Support Forces (RSF) have been fighting President General Abdel-Fattah Burhan’s Sudanese Armed Forces in a vicious civil war since April. Peace talks in Riyadh in late September failed to deliver a ceasefire, and the UAE has been implicated in the delivery of weapons to the RSF.
Tunisia is quieter, but the economy is in a delicate state and the lurch towards authoritarian dictatorship under President Kais Saied is making observers nervous.
Tensions between Algeria and Morocco are also problematic. The two countries have long been at odds over Western Sahara, but relations have become more strained in recent years, with Algiers severing diplomatic ties in 2021. Algerian coast guards killed two Moroccans in August 2023 when they strayed into Algerian waters on their jet skis – an incident that could have readily escalated.
In Iraq, political disagreements came to the fore in November when the Supreme Court removed parliamentary speaker Mohammed al-Halbousi – the country’s most powerful Sunni politician – from office. Iran-backed Iraqi militias have also been flexing their muscle since the Gaza war, launching dozens of attacks on US forces in the country.
Other Iraqi court rulings have also caused disquiet, particularly a September decision by the Constitutional Court to annul a bilateral treaty on sharing the Khor Abdullah waterway with Kuwait.
Iran meanwhile weathered the protests that erupted in the wake of Marsa Amini’s death in September 2022. Tehran’s emerging challenge is in managing the response of its regional allies to the Gaza conflict. The actions of its other allies
in the region – including the Houthis in Yemen and Hezbollah in Lebanon – could set the tone for the whole region in the year ahead.
Image: Smoke rises after Israeli air strikes on the city of Rafah in the southern Gaza Strip on 10 October 2023
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Webuild wins $600m Diriyah Square project deal
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Webuild wins $600m Diriyah Square project deal
14 July 2025
Italian contractor Webuild has announced that it has won a $600m contract from Diriyah Company for a package for the Diriyah Square project.
The contract relates to construction works on package three of the Diriyah Square project. It involves the finishing and mechanical, electrical and plumbing works on more than 70 buildings and public spaces within Diriyah Square.
These assets cover a total area of about 365,000 square metres.
Webuild is already working on the underground multi-storey car park at Diriyah Square.
The three-floor underground car park will serve the mixed-use Diriyah Square district, which will include leisure and entertainment, hotels, retail, grade A offices, the King Salman Grand mosque and residential units designed in the traditional Najdi architectural style.
The car park has a floor area of 1 million square metres, with underground roads and tunnels below Diriyah Square, and a capacity for 10,500 cars.
The parking facility will directly connect commuters with all of Diriyah’s destinations, including Wadi Hanifah, the Western Ring Road and a national motorway. It will be a key component of the City of Riyadh Arterial Road system.
In an official statement on its website, Webuild said that the construction works on the car park are 55% completed.
MEED reported in January 2021 that Diriyah Company had selected Webuild for the super basement car park at the Diriyah project in Riyadh.
Diriyah gigaproject
The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.
The company awarded several significant contracts last year, including three contracts worth over SR21bn ($5.5bn). These included an estimated $2bn contract awarded to a joint venture of El-Seif Engineering & Contracting and China State to build the North Cultural District.
In July last year, Diriyah also awarded a $2.1bn package to a joint venture of local contractor Albawani and Qatar’s Urbacon to construct assets in the Wadi Safar district of the gigaproject.
Then in December, Diriyah Company awarded an estimated SR5.8bn ($1.5bn) contract to a joint venture of local firm Nesma & Partners and the local branch of Man Enterprise for its Jabal Al-Qurain Avenue cultural district, located in the northern district of the Diriyah Gate project.
Once complete, Diriyah will have the capacity to accommodate 100,000 residents and visitors.
READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF
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August deadline for Diriyah Pendry superblock package
14 July 2025
Saudi gigaproject developer Diriyah Company has asked firms to submit commercial proposals by 13 August for a contract to build the Pendry superblock package in the second phase of the Diriyah Gate development (DG2).
MEED understands that the tender was issued in June, with the technical bid submission deadline set for 6 July.
The Pendry superblock encompasses the construction of a hotel, known as the Pendry Hotel, along with residential and commercial assets.
The project will span an area of 75,365 square metres and is located in the northwestern district of the DG2 area.
Earlier this month, MEED exclusively reported that Diriyah Company is preparing to tender more superblock packages this quarter, following the receipt of prequalification statements from interested firms.
Notices were issued in mid-June for packages that include the Waldorf Astoria superblock and the Edition superblock, both located in DG2.
The Waldorf Astoria superblock is a mixed-use development featuring the Waldorf Astoria Residences & Hotel, commercial and residential facilities and office spaces.
The Waldorf Astoria Hotel is a 200-key property, while the Waldorf Astoria Residences will offer around 46 branded residences.
The project is located along the Grand Boulevard South and the Northern Arterial Road in the Boulevard Northwestern district at DG2.
The prequalification documents for this package were submitted on 29 June.
Prequalification documents for the Edition superblock were submitted on 2 July.
This package comprises a mix of residential, commercial and office spaces, including the 200-key Edition Hotel and 150-key Equinox Hotel.
The project is situated between King Khalid Road and the Grand Boulevard within the Boulevard East district in DG2.
Diriyah Company has also received prequalification statements from firms interested in constructing the upcoming Radisson Red superblock in DG2.
The Radisson Red superblock comprises a hotel, residential apartments, retail facilities, commercial office spaces and a park.
The project is situated in the Boulevard East district, between King Khalid Road and the Grand Boulevard in Diriyah.
Diriyah also tendered a contract in April to build the new iconic museum in the DG2 area.
Diriyah gigaproject
The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.
The company awarded several significant contracts last year, including three contracts worth over SR21bn ($5.5bn). These included an estimated $2bn contract awarded to a joint venture of El-Seif Engineering & Contracting and China State to build the North Cultural District.
In July last year, Diriyah also awarded a $2.1bn package to a joint venture of local contractor Albawani and Qatar’s Urbacon to construct assets in the Wadi Safar district of the gigaproject.
Then in December, Diriyah Company awarded an estimated SR5.8bn ($1.5bn) contract to a joint venture of local firm Nesma & Partners and the local branch of Man Enterprise for its Jabal Al-Qurain Avenue cultural district, located in the northern district of the Diriyah Gate project.
Once complete, Diriyah will have the capacity to accommodate 100,000 residents and visitors.
READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF
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Penspen to expand workforce in Neutral Zone
14 July 2025
UK-based engineering and project management company Penspen is expanding its headcount in the Neutral Zone, which is shared by Saudi Arabia and Kuwait, according to a senior executive.
Penspen currently has 130 employees working in the Neutral Zone, also known as the Divided Zone. The company expects to increase the headcount to 200 by the end of the year, according to Neale Carter, the company’s executive vice-president for the Middle East, Africa and Asia-Pacific.
“It’s a challenging environment, but we’re very pleased to be there,” he said.
Penspen was invited to join the tendering programme for a range of projects for state-owned Kuwait Gulf Oil Company (KGOC), which is a partner in Al-Khafji Joint Operations (KJO) alongside Saudi Arabia’s Aramco Gulf Operations Company (AGOC).
Penspen was previously the project management consultant for KJO in the Neutral Zone from 2006 until 2017, when US-based Jacobs replaced them in the role.
Penspen then went through the tendering process in 2022 and won the contract back in 2023.
The current contract is a five-year project management consultancy services contract.
The Neutral Zone has seen an uptick in oil and gas activity in the past couple of years.
In May, MEED reported that KJO has more than 20 projects currently ongoing to develop the Khafji field, which is located in the shared territory.
Additionally, KJO is currently in the tendering phase with engineering, procurement and construction (EPC) works on the Dorra gas field development project, which is also located in the Divided Zone.
KJO has divided the scope of work on the Dorra gas field development project, which is estimated to be valued at up to $10bn, into four EPC packages – three offshore and one onshore.
In May, Saudi Arabia and Kuwait announced a new oil discovery in the shared territory.
The oil was discovered in the North Wafra Wara-Burgan field, located five kilometres north of the onshore Wafra field, within Wafra Joint Operations – a 50:50 joint venture of Kuwait Gulf Oil Company and US energy company Chevron.
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Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:
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Saudi Arabia signs deals for $8.3bn of renewables projects
14 July 2025
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A consortium of Acwa Power, Water & Electricity Holding Company (Badeel) and Saudi Aramco Power Company (Sapco) has signed power purchase agreements (PPAs) with Saudi Power Procurement Company (SPPC) for seven renewable energy projects that will require $8.3bn of investment.
The projects, which have a total capacity of 15,000MW, include five large-scale solar photovoltaic plants with a total capacity of 12,000MW and two large-scale wind energy plants with a total capacity of 3,000MW.
Financial closes are expected by the third quarter of 2025. The projects are scheduled to start operating in the second half of 2027 and the first half of 2028.
The projects are part of Saudi Arabia’s National Renewable Energy Programme (NREP), which is led and supervised by the Energy Ministry. PIF has committed to developing 70% of Saudi Arabia’s renewable energy target capacity by 2030.
With the addition of these new projects, Acwa Power's solar and wind portfolio in Saudi Arabia now comprises 21 projects, representing more than 34GW of combined renewable capacity. Acwa Power's total renewable capacity portfolio, which includes projects in other countries, totals 51.9GW.
The Public Investment Fund (PIF) is the largest shareholder in Acwa Power; it is listed on the Saudi Stock Exchange (Tadawul) with a 44% stake. The PIF wholly owns Badeel. The PIF holds a 16% stake in Aramco, which is also listed on the Tadawul.
Acwa Power recently said it is raising SR7.1bn ($1.9bn) with a rights issue to finance its equity contributions in its growing portfolio of domestic and international energy and water projects, as part of its plan to triple managed assets by 2030.
According to the prospectus for the rights issue, between 75% and 85% of the proceeds will go towards funding its share in current and upcoming projects, while up to 20% may be used for mergers and acquisitions. The remainder will support corporate activities and early-stage project development to accelerate delivery timelines.
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Eni signs $1.35bn Algerian oil and gas deal
14 July 2025
Algeria’s state-owned oil and gas company Sonatrach and the Italian company Eni have signed a production-sharing hydrocarbons contract (PSC) estimated to be worth $1.35bn.
The contract covers the exploration and exploitation of the Zemoul El-Kebir concession area, located in the Berkine Basin, approximately 300 kilometres east of Hassi Messaoud, according to a statement by Sonatrach.
The deal with Eni is the latest in a string of high-profile agreements that Sonatrach has announced with international oil and gas companies.
The contract with Eni was signed under Hydrocarbons Law No 1913 and extends for a period of 30 years, with an extendable option for an additional 10 years.
It includes a seven-year exploration period, with $110m of the estimated $1.35bn investment budget expected to be used in the exploration phase.
In its statement, Sonatrach said: “The work programme associated with this contract includes the use of innovative technological methods, including the latest digital solutions related to exploitation, in addition to the use of modern technologies to improve production and recover reserves.
“It is worth noting that, within the framework of implementing this contract, preference is given to the use of local content and the use of subcontracting services from national operators.”
Expected production from the area covered by the deal has been estimated at 415 million barrels of oil equivalent, including 9.3 billion cubic metres of gas, over the contract period.
The signing of the final PSC with Eni follows a provisional deal that was signed between Sonatrach and Eni on 19 May 2024.
As well as signing the PSC relating to the Zemoul El-Kebir concession area, the two parties also signed a gas agreement aimed at defining the terms of the hydrocarbons contract relating to the marketing of dry gas quantities from the operating area, intended for export.
A framework agreement was also signed between Sonatrach and Eni Corporate University, aiming to develop the skills of Sonatrach employees and transfer knowledge through the Eni Corporate University training institution, for a period of three years.
In June, Algeria awarded five out of the six oil and gas exploration licences it offered during its 2024 bidding round, a move viewed as a success by stakeholders in the country’s energy sector.
The companies that were awarded blocks included France’s TotalEnergies, state-owned QatarEnergy, Eni and PTTEP of Thailand.
The latest licensing round was followed by meetings between Algeria’s President Abdelmadjid Tebboune and delegations from US-based oil and gas companies ExxonMobil and Chevron.
Project activity across Algeria’s energy, industrial and manufacturing sectors is steadily building as the country focuses on a vertically-integrated strategy that leverages the exploitation of its natural resources.
READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDF
UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge
Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:
> AGENDA: UAE-Turkiye trade gains momentum> INTERVIEW 1: Building on UAE-Turkiye trade> INTERVIEW 2: Turkiye's Kalyon goes global> INTERVIEW 3: Strengthening UAE-Turkiye financial links> INTERVIEW 4: Turkish Airlines plans further growth> CURRENT AFFAIRS: Middle East tensions could reduce gas investments> GCC REAL ESTATE: Gulf real estate faces a more nuanced reality> PROJECTS MARKET: GCC projects market collapses> INTERVIEW 5: Hassan Allam eyes role in Saudi Arabia’s transformation> INTERVIEW 6: Aseer region seeks new investments for Saudi Arabia> LEADERSHIP: Nuclear power makes a global comeback> LEVANT MARKET FOCUS: Levant states wrestle regional pressures> GULF PROJECTS INDEX: Gulf projects index continues climb> CONTRACT AWARDS: Mena contract award activity remains subdued> ECONOMIC DATA: Data drives regional projects> OPINION: A farcical tragedy that no one can endTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14254529/main.png