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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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    The growing trade volumes between the UAE and Turkiye involve a mix of competition and collaboration across various sectors. 

    One area of competition is aviation. Turkish Airlines has emerged as a major global player over the past 20 years, with its network now covering more countries than any other airline.

    Turkiye’s aviation sector entered a new era in 2019 when Istanbul Grand airport opened. The first phase has the capacity to handle 90 million passengers a year, and the plan is for the capacity to reach 200 million once later phases are completed. 

    The airport’s globally strategic location combined with its large and expandable capacity will give Turkiye’s aviation
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    While competition is evident, Turkish Airlines insists there is enough room for it and the Gulf airlines to grow as the centre of gravity for global aviation shifts from west to east.

    On a macro level, the UAE and Turkiye are complementary economies

    Beyond aviation, the trade relationship encompasses a wide range of sectors, including defence, logistics and construction. Over the past two years, Turkish contractors have secured significant contracts in the UAE. Turkish construction companies are now exporting the experience they have gained on projects in Turkiye to the UAE, as major government- backed infrastructure projects that include airports and railways move into tendering. 

    At the same time, UAE investments in Turkiye’s energy and financial sectors are growing, with notable examples including Emirates NBD’s investment in DenizBank and International Holding Company’s investment in Kalyon Energy. 

    These investments show that on a macro level, the UAE and Turkiye are complementary economies, with each holding a different mix of resources, capital and expertise. The strategic location of both countries amplifies the business case for trade even further.

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  • Building on UAE-Turkiye trade

    4 July 2025

    This package on UAE-Turkiye relations also includes:

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    > UAE-Turkiye financial links strengthen
    > Turkish Airlines plans further growth

     

    The UAE-Turkiye Comprehensive Economic Partnership Agreement (Cepa) that came into effect in September 2023 has already exceeded expectations. 

    Non-oil trade between the UAE and Turkiye grew by 11.5% in 2024, reaching a total of $40.5bn. This milestone surpasses a target of the Cepa three years earlier than planned. As a result, Turkiye is now the UAE’s fourth-largest non-oil trading partner, rising from seventh place in 2021.

    Trade between the UAE and Turkiye is growing strongly, with both countries increasingly viewed as strategic hubs for accessing broader markets. 

    The growth story builds on already established business links between the two countries. 

    “UAE-based companies and funds are already very active in Turkiye,” says Burak Daglioglu, president of the investment and finance office of the Presidency of the Republic of Turkiye. 

    “Firms like DP World and others in private equity and venture capital are playing a key role.”

    Strengthening ties

    Since the Cepa was signed in 2023, bilateral investment has accelerated, with Turkish companies also expanding into the UAE. 

    “That’s the mark of a healthy relationship,” he says. “When it’s balanced and bilateral, it’s more sustainable.”

    He adds that companies in both countries see the other not just as a market, but as a hub. “UAE firms use Turkiye to access Europe and Central Asia; Turkish firms use the UAE to reach Asia and Africa. This creates a complementary strategy for both sides.”

    In the energy sector, the focus is on renewables, with UAE firms eyeing major solar and wind projects in Turkiye. “We have huge potential in renewables, and there are ongoing talks with UAE investors,” says Daglioglu.

    In technology, Turkiye is emerging as a regional player in artificial intelligence (AI), financial technology (fintech), and healthcare technology.

    “Our infrastructure is increasingly AI-ready,” he says. “We have data centres, renewable power sources and connectivity. 

    “We also have a robust startup ecosystem, with early-stage funding rising from under $100m a decade ago to over $1bn today.”

    Defence is another key area of cooperation. “There are some ongoing projects in the defence sector between Turkiye and the UAE,” Daglioglu says. “It’s better not to name names at this stage, but it’s a promising area.”

    Venture capital (VC) is also playing an important role in promoting regional innovation. “Ten years ago, the startup scene was nascent. Now, it’s a cornerstone of our investment strategy. Dubai, as a regional VC hub, has been instrumental.”

    To support this growth, Turkiye has developed local VC legislation and attracted international funds, including those from Saudi Arabia, UAE family offices and corporate investors. A joint UAE-Turkiye technology fund worth $300m is also nearing finalisation. 

    “It’s not just about exits anymore. Turkish startups are scaling regionally and globally, with Dubai often serving as their capital and client gateway.”

    Turkiye is also a major industrial hub and, with a population of 85 million, has extensive human resources. “We have the talent, the infrastructure and the resilience,” he says. 

    “From automotive and mobility to chemicals and energy storage, we are expanding our industrial base.”

    We have huge potential in renewables, and there are ongoing talks with UAE investors

    Looking ahead

    Turkiye’s trade with the UAE and the rest of the GCC could be enhanced even further with the Development Road project, which is a 1,200-kilometre highway and railway linking Iraq’s southern Faw Port to Europe through Turkiye. 

    “The Development Road will not happen overnight – it’s a long-term, complex undertaking,” Daglioglu says. “But its impact will be global. Reducing shipping lead times between Asia and Europe by up to a week is hugely significant in today’s fast-moving markets.”

    Designed to connect the Gulf to Europe through Turkiye, the Development Road includes a high-speed rail network for both cargo and passengers, as well as a parallel motorway.

    For Daglioglu, the Development Road corridor offers Turkiye, the UAE and the GCC  states another platform for economic diversification.

    “This is more than a transport project, it’s a regional realignment,” he says. 

    “It will unlock a flow of goods, people, capital and data. Fibre infrastructure can run alongside the rail and motorway, creating a dual-purpose corridor that will support our AI and digital economy ambitions.”

    Historically, Turkiye has been well integrated with northern markets in Europe. Due to years of conflict in Iraq and Syria, however, its southern connectivity has lagged. 

    The Development Road, along with recent discussions to reopen direct links with Syria, offers opportunities for southern expansion.

    “We have invested heavily in northern logistics. Now, it’s time to strengthen our southern corridor,” Daglioglu says. “The Development Road could finally make direct access to the GCC markets a reality.”

    The corridor could also open up new avenues for digital infrastructure, such as subsea cables and terrestrial fibre,
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    “This could be the basis for a digital Silk Road, supporting everything from AI to fintech.” 

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  • Firms submit Diriyah’s Radisson Red superblock prequalifications

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    Register for MEED’s 14-day trial access 

    Saudi gigaproject developer Diriyah Company has received prequalification statements from firms interested in constructing the upcoming Radisson Red superblock in the second phase of the Diriyah Gate development (DG2).

    The prequalification notice was issued on 11 June, and submissions were made on 22 June.

    The Radisson Red superblock consists of 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.

    The project is the latest in a series of other superblocks that are expected to be floated to the market this year, including the Waldorf Astoria superblock, Edition superblock and Pendry superblock.

    Diriyah tendered a contract in April to build the new iconic museum in the DG2 area. 

    The same month, MEED exclusively reported that the client had awarded an estimated SR4bn ($1.1bn) contract for a utilities relocation package for the King Saud University (KSU) project located in DG2.

    The contract was awarded to the joint venture of Beijing-headquartered China Railway Construction Corporation and China Railway Construction Group Central Plain Construction Company.

    Also in April, MEED reported that the company had awarded an estimated SR5bn ($1.3bn) construction deal to build the Royal Diriyah Opera House.

    The contract was awarded to a joint venture of local firm El-Seif Engineering & Contracting, Beijing-headquartered China State Construction Engineering Corporation and Qatari firm Midmac Contracting.

    Tendering activity is also progressing on several other major schemes at Diriyah, including the King Khalid Road project, which passes through the development. The client received bids from firms in the second week of April for the main construction works on this project.

    The client is also expected to finalise the contract award shortly for the Arena Block assets in the Boulevard Southwest section 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 local firm Nesma & Partners 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.

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  • Court rules against Petrofac restructuring plans

    4 July 2025

    An appeals court in the UK has upheld an appeal against Petrofac’s restructuring plans, increasing uncertainty about the UK-based engineering company’s future.

    The appeal was brought by Italy’s Saipem and South Korea’s Samsung E&A.

    The ruling against the restructuring plans comes less than two months after Petrofac received formal approval from the High Court of England & Wales to implement its restructuring plan.

    Petrofac previously said that its restructuring plan would unlock $355m in new funding for its operations.

    Petrofac said on 1 July that the appeal was upheld “on narrow grounds associated with the terms of the 'new money' financing and the evidence provided in support of it”, that had previously been accepted by the High Court.

    The company said that all other grounds of appeal were unsuccessful.

    It added that it was “carefully studying” the detailed judgment and would discuss with key stakeholders its implications and potential routes forward.

    The company’s shares were suspended from trading on the UK stock exchange at the end of April due to Petrofac’s failure to publish its 2024 financial results on time.

    Wood Group, another UK-based engineering company that is active in the Middle East and North Africa region, also saw its shares suspended on the same day, for the same reason.

    In January this year, Petrofac announced that it had reached a binding agreement with its creditors.

    Petrofac has been struggling with financial problems since its share price collapsed in December 2023.

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  • King Salman airport sets July deadline for fourth runway bids

    4 July 2025

     

    King Salman International Airport Development Company (KSIADC) has allowed firms until 8 July to bid for the design-and-build of the fourth runway at King Salman International airport (KSIA) in Riyadh.

    The tender was floated on 17 April. The previous bid submission deadline was 17 June.

    It is understood that the third and fourth runways will add to the two existing runways at Riyadh’s King Khalid International airport, which will eventually become part of KSIA.

    KSIADC, which is backed by Saudi Arabia’s Public Investment Fund, prequalified firms in September last year for the main engineering, procurement and construction packages; early and enabling works; specialist systems and integration; specialist systems, materials and equipment; engineering and design; professional services; health, safety, security, environment and wellbeing services; modular installation and prefabrication; local content; and environmental, social and governance and other services.

    The entire scheme is divided into eight assets. These are:

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    • Real estate

    In August last year, KSIADC confirmed it had signed up several architectural and design firms for the various elements of the project.

    UK-based Foster+Partners will design the airport’s masterplan, including the terminals, six runways and a multi-asset real estate area.

    US-based engineering firm Jacobs will provide specialist consultancy services for the masterplan and the design of the new runways.

    UK-based engineering firm Mace was appointed as the project’s delivery partner, and local firm Nera was awarded the airspace design consultancy contract.

    Project scale

    The project covers an area of about 57 square kilometres (sq km), allowing for six parallel runways, and will include the existing terminals at King Khalid International airport. It will also include 12 sq km of airport support facilities, residential and recreational facilities, retail outlets and other logistics real estate.

    If the project is completed on time in 2030, it will become the world’s largest operating airport in terms of passenger capacity, according to UK analytics firm GlobalData.

    The airport aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. The goal for cargo is to process 3.5 million tonnes a year by 2050.

    Saudi Arabia plans to invest $100bn in its aviation sector. Riyadh’s Saudi Aviation Strategy, announced by the General Authority of Civil Aviation (Gaca), aims to triple Saudi Arabia’s annual passenger traffic to 330 million travellers by 2030.

    It also aims to increase air cargo traffic to 4.5 million tonnes and raise the country’s total air connections to more than 250 destinations. 

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    https://image.digitalinsightresearch.in/uploads/NewsArticle/14200608/main.jpg
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