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Monthly briefing: 20 key developments in the region

25 October 2022

By MEED staff

> Opec and its allies cut oil output

> Saipem wins $4.5bn North Field offshore gas contract

> Qatar to inaugurate 800MW solar farm

> Lebanon and Israel agree maritime border deal

> Aramco launches SME stimulator programme

> Region to be third-largest hydrogen source by 2050

> Egypt ready to supply natural gas to Lebanon

> Riyadh makes debt announcements

> Neom hydrogen project expected to close by year-end

> Abu Dhabi transfers ownership of Etihad Airways to ADQ

> Mipco secures $4bn to refinance Abu Dhabi plant

OIL OUTPUT CUTS

Opec+ to slash production from November to keep prices high

The Opec+ alliance of oil producers has decided to reduce oil production by 2 million barrels a day (b/d) from November to further shore up crude prices, which have fluctuated amid fears that a global recession could curb oil demand. 

The decision, which was led by Saudi Arabia and Russia, was taken at a meeting of the group in Austria on 5 October. 

The move represents a major reversal in production policy for Opec+, which slashed output by a record 10 million b/d in early 2020 when demand plummeted as a result of the Covid-19 pandemic. Since then, the group has gradually unwound those cuts. Read more

 Tight oil market increases unease for stakeholders



The 33rd Opec and non-Opec ministerial meeting on 5 October. Credit: Opec

US FALLOUT

Saudi Arabia and UAE condemn US warning of ‘consequences’

Saudi Arabia and the UAE have rejected as baseless accusations that the Opec+ decision to reduce oil production from November was politically motivated against the US.

Riyadh has insisted decisions by Opec and its allies were taken “purely on economic considerations”, and said its economic advice had been to resist calls to delay the production cut. 

The UAE issued a statement calling upon the US to refrain from “politicisation” of the Opec+ decision. US President Joe Biden had previously warned that there would be “consequences” for Saudi Arabia and the Opec+ members for their decision to cut oil output.

EGYPT

World leaders to gather for meeting on climate change

Leaders from almost 200 countries will meet in Sharm el-Sheikh, Egypt, on 6-18 November for the UN’s 27th Conference of the Parties (Cop 27) climate change summit. 

Egypt’s International Cooperation Minister, Rania al-Mashat, has previously said that the focus of Cop 27 should be moving from “pledges to implementation”. The conference aims to deliver action on issues critical to tackling the climate emergency, from reducing greenhouse gas emissions, building resilience and adapting to the impacts of climate change, to delivering on the commitments to finance climate action in developing countries.

STEEL

Region could lead global steel decarbonisation efforts

As the global steel industry considers switching to direct reduced iron (DRI) production, the Middle East and North Africa (Mena) region is primed to start producing carbon-neutral steel, according to a report by the Institute for Energy Economics & Financial Analysis. 

“The Mena region can lead the world if it shifts promptly to renewables and applies green hydrogen in its steel sector,” says Soroush Basirat, the author of the report. 

“The region’s steel sector is dominated by direct reduced iron-electric arc furnace technology, which releases lower emissions than the … coal-fuelled blast furnace and basic oxygen furnace process used in 71 per cent of global crude steel production in 2021.” 

The Mena region produced just 3 per cent of global crude steel last  year, but accounted for nearly 46 per cent of the world’s DRI production. 

Basirat adds: “Mena has an established supply of DR-grade iron ore and its iron ore pelletising plants are among the world’s largest.”

SAUDI ARABIA

Riyadh announces government spending increase in 2022-24

Saudi Arabia has announced increases in government spending in 2022-24 of more than 18 per cent, which is close to SR175bn ($47bn) or 4 to 4.5 per cent of GDP. 

The rise in spending targets points to smaller fiscal surpluses in the coming years, according to Moody’s Investors Service. 

Increased spending could contribute to reducing the kingdom’s economic reliance on hydrocarbons, provided the spending is successfully deployed to advance government-sponsored diversification projects.

Saudi Arabia’s finances and ambition align

IRAQ

Prime minister-designate vows to act against corruption

Iraq’s prime minister-designate Mohammed Shia al-Sudani has pledged to take action against corruption after authorities announced that ID3.7tn ($2.5bn) had been embezzled from the General Tax Authority’s trust account held by a branch of Rafidain Bank. 

The Iraqi Integrity Commission has said it is opening an investigation into the theft 

On 13 October, Iraq’s parliament elected Abdul Latif Rashid as the country’s new president. He then tasked Al-Sudani with forming a new government to end a year of political gridlock. 

Al-Sudani faces a challenge in the coming weeks as he attempts to appoint a new cabinet of ministers. Members of the Iraqi political bloc led by Shiite cleric Moqtada al-Sadr have said that they will not join the new government.

YEMEN

Houthi rebels attack oil terminal in southern Yemen

Iran-backed Houthi rebels have claimed responsibility for an attack on a cargo ship at an oil terminal in the south of the country on 21 October. The group said the attack by explosives-laden drones was meant to prevent pro-government forces from using the Al-Dhabba terminal for oil exports. 

The incident occurred in Ash-Shihr in the Hadramawt governorate, and targeted the Marshall Islands-flagged tanker Nissos Kea. The Greek owners of the tanker said it was undamaged. 

The internationally recognised government of Yemen said that its forces had intercepted armed drones launched against the Al-Dhabba oil terminal. 

UN special envoy for Yemen, Hans Grundberg, called the attack a “deeply worrying military escalation”. The Yemeni government sent a letter to the UN Security Council regarding the “threat to disrupt international maritime navigation and target ships and oil infrastructures”. 

The attack was the first military action announced by the Houthis since a truce between Yemen’s warring sides expired on 2 October.

LEBANON-ISRAEL

Lebanon and Israel reach maritime border deal

Lebanon and Israel have forged a deal to end a long-running maritime border dispute in the gas-rich Mediterranean Sea. Lebanon’s deputy speaker Elias Bou Saab said that an agreement had been reached that satisfies both sides. 

It is hoped that the new deal will resolve the two countries’ dispute over a swathe of territory in the Mediterranean Sea in an area where Lebanon aims to explore for natural gas, and near waters where Israel has already found commercially viable quantities of hydrocarbons. Read more

GCC

Region faces green hydrogen production challenges

GCC governments including Oman, Saudi Arabia and the UAE are developing zero-carbon green hydrogen and low-carbon blue hydrogen schemes. However, achieving large-scale production, especially of green hydrogen, will be challenging in the coming years, according to Moody’s Investors Service. 

While both green and blue hydrogen will play a role in reducing the global carbon footprint, only green hydrogen has the potential to reduce the reliance of GCC countries on hydrocarbons, but this will take several years, Moody’s says. 

In the short to medium term, GCC countries’ access to cheap domestic natural gas, their carbon capture and storage expertise, and the limited availability of infrastructure make blue hydrogen production a more viable option than the more expensive and challenging production of green hydrogen.

Region to be third-largest hydrogen source by 2050
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    Oil prices rose above $100 a barrel on 9 September for the first time since July as the US-Iran conflict escalated and Iran-backed Houthi forces attacked Saudi energy infrastructure.

    Brent crude futures reached $100.95 a barrel, while US benchmark West Texas Intermediate (WTI) rose to $95.60. Brent had last traded above $100 on 24 July.

    The latest escalation has heightened concerns about oil supplies from the region, with shipping through both the Strait of Hormuz and the Red Sea facing disruption.

    Flows through the Strait of Hormuz had fallen below 2 million barrels a day (b/d) from about 8-9 million b/d before the latest escalation, according to Rystad Energy.

    At the same time, Houthi attacks on Saudi Arabia threaten another important route for oil exports, with the group targeting energy infrastructure and shipping in and around the Red Sea.

    US strikes on Iranian tankers

    US forces destroyed five Iranian crude oil carriers on 8 September after Iran’s Islamic Revolutionary Guard Corps (IRGC) targeted a US Navy warship with ballistic missiles.

    The US Central Command (Centcom) said the warship successfully evaded two Iranian attacks and that no US personnel were harmed.

    Four of the Iranian vessels – Kaviz, Charminar, Horizon 1 and Riesco – were struck in the Gulf of Oman, while the Derya was attacked near Kharg Island, Iran’s main crude export hub.

    The M/T Riesco subsequently sank in the Gulf of Oman, according to Centcom.

    Iran responded by launching ballistic missiles towards Jordan. Jordan’s armed forces said 18 of 20 missiles were intercepted, with the remaining two falling in unpopulated areas.

    Iran’s IRGC also said it had attacked two US naval vessels, eight oil tankers and 10 other vessels in the Gulf, although it did not identify the vessels or provide evidence of the attacks.

    The latest exchanges mark a further escalation in the US-Iran conflict, which began on 28 February.

    Houthi attacks raise supply concerns

    The conflict has also widened into a renewed confrontation between Saudi Arabia and Yemen’s Iran-backed Houthi movement.

    On 8 September, Saudi authorities said Houthi attacks had targeted civilian and economic sites in Abha, Khamis Mushait, Jazan and Najran in the south of the kingdom, injuring 73 people.

    Saudi Arabia’s Ministry of Energy said several energy sector facilities and installations had been targeted, causing fires and forcing a temporary halt to some operations.

    The Houthis said their attacks were in response to Saudi military action in Yemen, including what they described as attacks on Houthi positions and a Saudi blockade of ports and airports.

    Riyadh condemns attacks

    Saudi Arabia has strongly condemned the Houthi attacks and warned that it would take measures to defend its territory and national assets.

    In a statement on 8 September, the Ministry of Energy said authorities were working to address the impact of the attacks and ensure the safety of facilities and personnel while maintaining operations in accordance with approved plans.

    Saudi Arabia’s Ministry of Foreign Affairs also condemned the attacks and said the kingdom had the right to take measures to defend its sovereignty and protect its citizens, residents and national assets.

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  • What actually slows a gigaproject down

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    Ask anyone delivering a major programme in the GCC what causes delays and sequencing will come up early. Utilities go in too late. Approvals lag behind construction. Stations, depots and access roads are procured as if they belong to different projects rather than one system.

    “None of this is new. The industry has understood these risks for years,” says Alan Caldwell, managing director for transport and infrastructure at WSP Middle East.

    For Caldwell, that is what makes the pattern worth interrogating rather than simply restating.

    “The more important question is why the same issues around interfaces, approvals, stakeholder alignment and delivery sequencing continue to slow major programmes when the risks are already so well understood,” he says.

    The answer, he argues, is not that these programmes are too big or too technically complex. What breaks a schedule is a wider system delivered as a set of disconnected parts; an approval sitting with an authority team with no visibility of the construction sequence downstream; or a station package proceeding without the utilities diversion it depends on.

    “Infrastructure programmes do not struggle because a railway is too large or a highway network is too complex,” Caldwell says. “They encounter difficulties when interconnected elements are delivered in the wrong order.”

    Sequencing decisions are rarely purely technical either, he adds. They are commercial – shaped by which assets need to unlock value first, which phases are tied to funding, and where sales or investment assumptions depend on infrastructure landing in a particular order.

    Approvals sit at the centre of that logic. On many programmes, they become one of the biggest sources of lost time – not because the requirements are unreasonable, but because approvals are not planned, evidenced or owned as part of the delivery logic from day one.

    Caldwell has seen the same pattern across three decades of Gulf delivery, from early work on Palm Jumeirah to today’s region-wide transport programmes.

    “The decisive factor has often been the same: whether interfaces, approvals, responsibilities and delivery sequencing are aligned early enough to prevent complexity becoming delay.”

    Integration needs to be well understood

    “Most programme teams in the region would say they understand the need for integration,” Caldwell says. Fewer are structured to deliver it. “The harder task is turning that understanding into the way projects are actually set up and managed,” he argues.

    Riyadh Metro is the reference point he returns to, precisely because engineering complexity was not the deciding factor in its delivery.

    Coordinating a city-scale transport system meant aligning design, construction, systems, utilities and stakeholder interfaces across every delivery vertical.

    “The lesson for the region today is clear,” Caldwell says. “Ambitious programmes need a delivery model that gives every contributor a shared view of progress, risk, decision-making and the business case driving programme priorities.”

    That shared view, he argues, will be what the next phase of Gulf delivery is judged on.

    Whether clients, consultants, contractors, operators and approval authorities can work to a single delivery logic will be key.

    “This requires more than coordination meetings. It requires integrated ways of working, shared common data environments and governance structures that make risks, decisions and dependencies visible before they become delays,” he says.

    From reporting progress to managing risk before it lands

    Digital tools have a role here, Caldwell says, but not as a headline in themselves.

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    With many of the region’s programmes running for a decade or more, he adds, delivery models also need to flex as funding assumptions, user needs and policy priorities change along the way.

    “The ambition behind the Gulf’s transformation programmes is not in question,” Caldwell says.

    What will determine how much of it is realised on time is whether delivery models evolve at the same pace: earlier integration, clearer approval pathways, shared data environments, and every contributor working to a delivery logic that connects technical sequencing with the funding and operational case behind it.

    “The region’s next challenge is not imagining bigger projects,” he says. “It is changing the way they are delivered, operated and adapted over time.”

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  • Qatari firm wins $221m Qiddiya stadium MEP deal

    9 September 2026

     

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    Qatari contractor Elegancia MEP, part of Estithmar Holding, has won a SR829m ($221m) mechanical package contract for the Prince Mohammed Bin Salman Stadium in Qiddiya, Saudi Arabia.

    The contract covers full mechanical, electrical and plumbing (MEP) works for the stadium, and is Elegancia MEP’s largest award in Saudi Arabia to date.

    The 45,000-seat stadium will feature a fully combined retractable pitch, roof and LED wall.

    The stadium’s main construction works are being undertaken by a joint venture of Spanish firm FCC Construction and local firm Nesma & Partners.

    Saudi gigaproject developer Qiddiya Investment Company awarded an estimated SR15bn ($4bn) deal to build the stadium in October 2024, as MEED exclusively reported.

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    The stadium is one of the venues for the kingdom’s 2034 Fifa World Cup bid and will host events such as the Saudi King Cup, the Asian Cup and the 2034 Asian Games.

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    Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

    Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:
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  • Consultants bid for Abu Dhabi light rail project management

    9 September 2026

     

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    Abu Dhabi Transport Company (ADTC) has issued a request for prequalification (RFQ) notice to consultants for a contract for project management engineering consultancy services for the first phase of the light rail transit network, also known as ADT4.

    The notice was issued on 7 September, with a submission deadline of 9 November.

    The project’s first phase will span 19 kilometres (km) and include 23 stations, connecting Zayed International airport (AUH) with nearby areas, including Yas Island, Al‑Raha Beach and Khalifa City.

    The key sections of the tram are:

    AUH to Yas Island: The tram will start from Terminal A at AUH and run through the Yas tunnel to Yas Gateway Park. It will serve areas including Yas Bay, Media Zone, Yas Plaza, Yas Drive, Yas Mall, Sea World and Water Edge.

    This section covers 13km and includes 13 at-grade stations and one underground station.

    Al-Raha: This section will stretch for 4.3km and run along Al-Raha Street. It will serve areas including Al-Zeina, Al-Muneera and Al-Bandar, towards the Aldar head office. The section will include seven at-grade stations.

    Etihad Plaza: This section will pass the Etihad Aviation Training Centre and span about 1.7km. It will feature a main depot near the Etihad Airways headquarters, along with two at-grade stations.

    The tender also covers the procurement of 25 trams, each with a capacity of 270 people, along with associated systems.

    The project was officially launched at the GlobalRail exhibition in Abu Dhabi in October last year.

    Referred to as Abu Dhabi Tram Line 4, the project will be delivered in three phases.

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    Future phases will extend towards Khalifa City and serve additional destinations across Yas Island.

    The project forms a key part of the recently announced AED170bn ($46bn) package of national transport and road projects to be implemented by 2030.

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