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Sudani makes fitful progress as Iraq’s premier

10 May 2023

 

Mohammed al-Sudani has served almost 200 days as Iraq’s prime minister since being sworn into office in late October.

In that time, he has launched a high-profile anti-corruption drive, sought to repair relations between Baghdad and the Kurdistan region, find an amiable balance in relations with Iran on the one hand and the Arab Gulf states and Western powers on the other, as well as giving greater stability to the state’s finances.

These are challenging issues and it remains too soon to judge if he can succeed, but progress on many fronts has often appeared fitful at best.

Soon after coming into office, Sudani threw his weight behind a high-profile anti-corruption drive, prompted by the multibillion-dollar ‘Heist of the Century’, which emerged just before his government took charge. The scandal involved the theft of an estimated ID3.7tn ($2.5bn) from the General Commission for Taxes.

However, after some early positive signs, observers say that the anti-graft drive appears to be losing momentum. One of the main suspects, Haitham al-Jubouri, was released on bail in January. The assets of another suspect, Nour Zuhair Jassim, were unfrozen by a court in April.

Corruption has been endemic in Iraq for years and continues to hobble the economy. There has also been limited progress in other areas of economic activity.

As the Washington-based IMF pointed out in its most recent Article IV report on Iraq, issued in early February, the economy has been growing, but that is in large part due to high oil prices. Indeed, it said Iraq’s dependence on oil revenues has increased rather than decreased.

Gas deal success

The importance of the energy sector is unlikely to diminish anytime soon, given current project activity. Sudani was involved in broking a deal with French oil major TotalEnergies in early April over the $10bn Gas Growth Integrated Project (GGIP), following four meetings with its chief executive Patrick Pouyanne.

The mammoth scheme had been announced in September 2021, but had stalled amid a dispute between Baghdad and Total over what size holdings each side would have. A resolution was helped by the arrival of QatarEnergy, which has taken a 25 per cent stake, leaving Iraq with 30 per cent (held via state-owned Basra Oil Company) and Total with 45 per cent.

That should enable more productive use of the country’s gas resources in the future and will also see the development of a 1GW solar power plant.

On the other hand, oil exports through Turkey have stopped since the International Chamber of Commerce (ICC) arbitration court in Paris ruled in favour of Baghdad in late March over Kurdish oil flows to Turkey via a cross-border pipeline.

Sudani has been building good publicity and a positive image for himself domestically and abroad, but it’s a rather thin veneer, behind which the machinery of entrenched interests is carrying on as usual
Omar al-Nidawi, Enabling Peace in Iraq Centre

Mixed reception

The former Iraqi ambassador to the US, Rend al-Rahim, has described Sudani as an “energetic and shrewd politician” – both necessary qualities to rise to the top in Baghdad and even more important to survive. Others have been less impressed by Sudani’s performance, though.

“He has been building good publicity and a positive image for himself domestically and abroad, but it’s a rather thin veneer, behind which the machinery of entrenched interests is carrying on as usual,” says Omar al-Nidawi, director of programmes at the Washington-based Enabling Peace in Iraq Centre (Epic).

Sudani came to power due to the support of former prime minister Nouri al-Maliki and the Coordination Framework, the grouping of Shia-majority parties with close links to Iran. They and their related militias remain influential to this day – part of a political system in which groups continue to use the state’s resources to entrench their own influence.

Budget concerns

Sudani’s budget plans have prompted concern among some about how that system of patronage might grow even larger. A three-year budget covering the period 2023-25 was finalised by the cabinet in mid-March and then sent to parliament in what was his administration’s first major piece of legislative action.

It included record spending of some ID198tn ($152bn) a year, including current spending of ID150tn and capital expenditure of ID48tn, as well as record annual deficits of some ID63tn, based on an average oil price of $70 a barrel and output of 3.5 million barrels a day (b/d). The plans include a sharp rise in the public sector wage bill, taking that item to a total of ID88tn.

That approach was the opposite of what the IMF had urged Sudani to do. In February, it said the government should save “the bulk of the oil windfall” and added that the 2023 budget “should avoid a procyclical spending boost and aim to increase savings with a gradual tightening of the fiscal stance”.

According to Nidawi, the budget plans point to a government that is more focused on using the state’s resources to bolster its support and minimise criticism rather than rebuild the economy. He described the budget as “exceptionally disappointing”, adding that the spending measures “threaten to waste the financial surplus from high oil prices by expanding the already bloated public payroll”.

The budget also included an attempt to find a new modus vivendi with the Kurdistan Regional Government (KRG), allowing for a 12.7 per cent budget share for Kurdistan and joint management of some 400,000 b/d of oil from the region. Sudani said on 13 March that Baghdad and Erbil had reached “a comprehensive agreement”. However, it remains to be seen if the system they have agreed will work effectively in practice.

In addition, Sudani’s budget has yet to be passed by parliament, and MPs could still force him to change his approach – a final vote may not happen until late May. What is not expected to change, for a time at least, is the parliament itself. When Sudani took office, it was amid speculation that an early election could be called, following the resignation of Moqtada al-Sadr’s bloc of MPs.

Since then, the idea of an early poll has faded and Sadr has remained in the background. Should he decide to change tack once again, Sudani could quickly face a far more challenging political situation, given Sadr’s past ability to quickly fill the streets with his supporters. At that point, Sudani’s political strengths and weaknesses will become far more apparent.

Iraq power projects make headway

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Dominic Dudley

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    The Omani construction and infrastructure projects market has maintained its momentum this year, with more than $3.3bn-worth of contracts awarded by late November.

    The outlook for the remainder of the year is promising, supported by a further $1bn-worth of schemes expected to be awarded before year-end.

    If achieved, this would mark the second consecutive year in which the market has exceeded $4bn in awards since 2015, continuing the steady growth Oman has experienced since emerging from the Covid-19 pandemic in 2021 and following the leadership transition in 2020, when Sultan Haitham Bin Tariq Al-Said succeeded Sultan Qaboos Bin Said.

    Transport contracts

    A major milestone for Oman’s construction sector came in May, when three contracts worth over RO258m ($670m) were awarded for packages three, four and five of the Adam-Thumrait Road dualisation project.

    The contracts were awarded to joint ventures comprising local and Saudi-based firms.

    In November, the Ministry of Transport, Communications & Information Technology awarded a $117m contract to the local subsidiary of Austria’s Strabag for the construction of Al-Mouj Road and its connection to 18 November Street in Muscat.

    Several major road projects are expected to be awarded imminently as tendering progresses. In October, 13 firms submitted bids for the design-and-build contract for a dual-carriageway in Sohar in North Al-Batinah Governorate.

    A contract award is also expected soon for the remaining works on parts one and three-A of the Adam-Thumrait dualisation project, for which local contractor Al-Hashemi Al-Rawas Trading & Contracting submitted the lowest bid of $116.5m in September.

    Airport development is also moving forward. In July, the Civil Aviation Authority (CAA) prequalified 20 local and international firms for a tender covering enabling works at Musandam airport.

    The CAA also tendered engineering and design contracts for the Jabal Akhdar, Masirah and Sohar airports.

    These projects fall under the National Aviation Strategy 2030, which aims to attract $3.6bn of investment in airport cities over the next two decades.

    According to MEED Projects, Oman has a pipeline of more than $20bn-worth of infrastructure schemes, the largest of which is the Muscat Metro.

    In November, it was reported that studies for the proposed Muscat Metro scheme had been completed. The scheme is expected to span 55 kilometres with 36 stations and cost around RO1bn ($2.6bn).

    Real estate

    Real estate development is also gaining pace, with several masterplanned projects advancing. Since assuming leadership, Sultan Haitham has pushed forward a number of major schemes.

    Among them is the New Smart City Salalah development, a 7.3-square-kilometre project on Oman’s southern coast. In October, 20 local and international engineering firms expressed interest in bidding for the detailed design contract.

    Progress is also evident on Sultan Haitham City, the most high-profile masterplanned development in the sultanate, overseen by the Ministry of Housing & Urban Planning (MHUP).

    Since last year, the ministry has signed multiple agreements for infrastructure works, including roads, electricity, water, sewage, irrigation, telecommunications and district cooling networks.

    Tendering has also resumed on the Grand Blue City project, also known as Al-Madina Al-Zarqa, located along the Al-Sawadi seafront about 100km northwest of Muscat. Originally launched in 2005, the scheme stalled during the global financial crisis.

    Preparatory works are now expected to begin soon for phase one, which includes 100 luxury villas, 202 lagoon villas, a five-star hotel, 130 serviced apartments (from studios to three-bedroom units) and 270 residential apartments.

    Another major development near the capital is Al-Khuwair Downtown, close to Muscat International airport and also led by MHUP. The contract for the marina infrastructure package is expected to be awarded soon following bid submissions in August.

    MHUP is also progressing the Omani Mountain Destination at Jabal Al-Akhdar, located 150km from Muscat. The $2.4bn project includes 2,537 housing units, 2,000 hotel rooms and a health and wellness village at an altitude of 2,400 metres.

    Other major upcoming MHUP-led schemes include Al-Thuraya City in Muscat and the Khor Grama project in Sur in the Ash Sharqiyah South Governorate.

    Investment avenues

    Foreign investors are playing a role. Egyptian developer Talaat Moustafa Group Holding (TMG) recently announced RO1.5bn ($4bn) of investment across two real estate projects in Muscat.

    Public-private partnerships (PPPs) are also supporting growth. In November, Oman tendered three key road schemes on a PPP basis: the Salalah-Thamrait road, the Muscat-Al-Dakhiliyah road (Al-Maabela–Thumayd section) and the Bausher-Al-Amerat tunnel road, alongside the Al-Amerat-Dima Wattayeen road.

    All these subsectors are expected to generate opportunities for construction companies over the coming years. The market also has the potential to grow far beyond its achievements last year. While that growth was positive, analysis of the historical numbers shows that the Oman market can achieve much more. In 2014, when the market peaked, there were over $9bn of awards – more than double the last year’s total. 

     

     

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  • LNG goals galvanise Oman’s oil and gas sector

    3 December 2025

     

    The Omani oil and gas sector, where large-scale, capital-intensive project investments are relatively rare, has been bolstered by progress on two major liquefied natural gas (LNG) developments.

    The government made headlines in July last year when it announced that majority state-owned Oman LNG would build a fourth train at its Qalhat LNG production complex in Sur.

    The new LNG train will have an output capacity of 3.8 million tonnes a year (t/y), increasing Oman LNG’s total capacity to 15.2 million t/y when it is commissioned in 2029.

    Oman LNG has recently made key progress on the expansion project, having shortlisted three bidders for the main engineering, procurement and construction (EPC) contract: a consortium of Chiyoda and South Korea’s Samsung C&T; Japanese contractor JGC Corporation; and a consortium comprising Italy’s Saipem and South Korea’s Daewoo Engineering & Construction.

    Technical and commercial bids are due in February and March 2026, respectively. The EPC tender process began less than a year after Oman LNG awarded the front-end engineering and design (feed) contract to US-based consultancy KBR.

    Separately, France’s TotalEnergies is studying a potential expansion of its Marsa LNG bunkering and export terminal in Oman. The move is significant, given that the first phase of the project is currently under construction in the sultanate’s northern industrial city of Sohar and will have an output capacity of 1 million t/y.

    TotalEnergies reportedly began an initial study on a potential second phase earlier this year. The French energy major may consider doubling the LNG complex’s capacity, although the plan has yet to be confirmed, according to sources.

    Earlier in the year, TotalEnergies appointed Technip Energies – already the main EPC contractor on the under-construction Marsa LNG terminal – to perform concept and feasibility studies on the proposed expansion phase.

    With Oman LNG advancing its fourth train and TotalEnergies assessing a potential doubling of LNG output, the sultanate is positioning itself to become a major global LNG player by 2030.

    Upstream pursuits

    Petroleum Development Oman (PDO), meanwhile, continues to advance projects aimed at maintaining and enhancing the sultanate’s oil and gas production capacity.

    PDO operates Block 6, Oman’s largest and most prolific hydrocarbons concession, spanning 75,119 square kilometres onshore and containing 202 oil fields and 43 gas fields.

    The government holds a 60% stake in PDO, with the remaining shares held by UK-based Shell (34%), France’s TotalEnergies (4%) and Thailand’s PTTEP (2%).

    In September, PDO awarded the main contract for an integrated project to produce natural gas from the Budour and Tayseer fields. The project aims to expand the capacity of existing gas production and processing facilities at Tayseer as part of the field’s second development phase. PDO will also appraise, produce and process sweet gas from the Budour field, located about 50 kilometres west of Tayseer.

    Kuwait-based Spetco International Petroleum Company won the design, build, own, operate and maintain (DBOOM) contract for the combined Budour-Tayseer sour gas processing facility.

    PDO has also launched a solicitation of interest with contractors for feed work on the second phase of a project to increase oil production from the Rabab Harweel field in Oman’s southernmost Dhofar Governorate.

    PDO began production from the asset in 2019 following completion of the estimated $3bn Rabab Harweel Integrated Project (RHIP), on which UK-based Petrofac carried out the EPC works.

    The second tranche of the RHIP is an enhanced oil recovery project that involves raising miscible gas injection in additional reservoirs across several smaller fields within the wider development. Scheduled to come on-stream beginning in 2028, tranche two aims to expand oil production capacity and improve gas injection by utilising ullage at the existing Harweel Main Production Station (HMPS).

    The scope also includes sustaining condensate and gas supply by using ullage from the first phase of RHIP, installing a depletion compression facility by 2030, and expanding the off-plot gas supply network.

    According to the request for information document, PDO has yet to decide on the project execution model, with the majority state-owned company considering a feed-to-EPC approach. The scope of work on the RHIP tranche two project is primarily divided into an oil and a gas scope.

    Separately, PDO has begun prequalification for EPC works to develop key on-plot facilities as part of the early phase development of the Dhulaima onshore field.

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    The project’s scope covers EPC activities and all associated civil, mechanical, piping, electrical, fabrication, instrumentation, control, testing, pre-commissioning, commissioning and de-commissioning works.

    PDO has also launched a prequalification exercise for a considerable scheme to appoint one or more contractors to build early production facilities for new appraisal exploration fields, enabling accelerated production and early monetisation.

    Boosting the energy value chain

    State energy conglomerate OQ Group is moving ahead with initiatives to expand natural gas liquids (NGL) production capacity, in line with trends across the Gulf’s national oil companies.

    OQ has launched prequalification for feed works on a project to build an NGL extraction facility in Saih Nihayda in central Oman, which will send condensates to Duqm for fractionation and export.

    Separately, Oman Tank Terminal Company (OTTCO), an OQ subsidiary, and Netherlands-based Royal Vopak signed a shareholder agreement in November to establish a new company in the Special Economic Zone at Duqm (Sezad).

    OTTCO will hold a 51% stake and Vopak the remaining 49%, with the new company set to develop and operate world-class energy storage and terminal infrastructure at Duqm.

    In addition, Energy Development Oman (EDO) has entered into a joint venture with Japan’s Sumitomo Corporation to establish a supply chain management company in the sultanate.

    The entity – set to be the first of its kind in Oman – will be based in Duqm, located in Al-Wusta Governorate on the sultanate’s geopolitically strategic Indian Ocean coast.

    The new company aims to provide supply chain management services to Oman’s energy sector, beginning with oil country tubular goods and later expanding to other products and services across the hydrocarbons value chain, renewables and other energy segments.

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  • Oman prepares for wave of IPP awards

    3 December 2025

     

    Contract activity in Oman’s power sector slowed in 2025, yet the sultanate is entering the new year with its diversification plans advancing and procurement for independent power projects (IPPs) gathering pace.

    In the renewables segment, progress continued in September with the award of the sultanate’s fourth large-scale solar IPP. The 500MW Ibri 3 solar IPP was awarded to a consortium of Abu Dhabi Future Energy Company (Masdar), Korea Midland Power and local firms Al-Khadra Partners and OQ Alternative Energy.

    The project also incorporates a 100MWh battery system, making it Oman’s first utility-scale solar-and-storage development.

    Ibri 3 accounted for almost 60% of the power contract awards in 2025. While this reflects a quieter year for investment, it also highlights the transition taking place in the market, with attention shifting towards grid reinforcement and preparations for a series of IPPs expected to advance over the coming period.

    The inauguration of the 500MW Manah 1 and Manah 2 solar IPPs earlier in the year added further capacity, building on the operational Ibri 2 plant, which came online in 2021.

    Wind procurement also continues to advance. In November, Nama Power & Water Procurement Company (Nama PWP) signed a 20-year power purchase agreement with a joint venture of Singapore’s Sembcorp Utilities and OQ Alternative Energy for the Dhofar 2 wind IPP.

    The 125MW plant is scheduled to begin operations in the third quarter of 2027 and will add capacity to the Dhofar Power System (DPS), where Oman’s first commercial wind farm, the 50MW Dhofar project, already operates.

    In the DPS, peak demand is anticipated to grow by 5% a year, from 612MW in 2022 to 837MW in 2029. The Sadah wind IPP, which will add around 99MW to the system once operational, is expected to move forward in the coming months.

    Overall, the direction of the sector remains aligned with national plans to increase renewable energy’s share of electricity generation to 30% by 2030 and expand steadily thereafter.

    Oman’s renewable energy programme is expected to expand considerably by 2030, with about 4.5GW of solar IPPs and around 1GW of wind farms planned across multiple sites.

    Increasing wind power

    The wider wind programme includes the Duqm and Mahoot wind IPPs, which are moving forward and will have a combined generation capacity of more than 600MW. In October, Nama PWP issued a supervisory consultancy services tender for the Duqm project.

    Several awards are expected in the near term. Jalan Bani Bu Ali, a wind IPP of about 100MW, and the 280MW Al-Kamil Wal Wafi solar photovoltaic IPP are among four IPPs currently under bid evaluation.

    While Oman continues to scale up renewable capacity, the need for firm generation remains. Peak demand in Oman’s Main Interconnection System (MIS) is expected to grow at an average of 3.4% a year over the current planning period, reaching about 8,350MW in 2029, up from 6,628MW in 2022. 

    Demand in the MIS is likely to continue rising through the decade, supported by industrial growth, population increases and development in economic zones such as Duqm.

    Nama PWP aims to meet this requirement with two major thermal schemes: the $1.53bn gas-fired Misfah IPP and the $753m Duqm IPP. The state offtaker has received three bids for the development and operation of the plants, which together will supply 2,400MW and are scheduled to begin delivering early power by April 2028.

    Developing the grid

    Similar to previous planning cycles, grid development remains a priority. In September, the GCC Interconnection Authority signed a $500m interim financing agreement with Sohar International Bank to support the development of the direct Oman-GCC electricity interconnection.

    The project involves constructing a 400-kilovolt double-circuit line stretching approximately 530km between the Al-Sila station in the UAE and a new Ibra substation in Oman.

    Once completed, the link will enhance regional power exchange capability, improve reserve margins and support the integration of intermittent renewable power.

    These regional works complement domestic transmission upgrades, including the continued expansion of the Rabt North-South Interconnection. The first phase, completed in 2023, connected the MIS with the Duqm Power System.

    Construction works are ongoing on the second phase, which is expected to reinforce the 400kV backbone southwards toward Dhofar.

    New technologies are also emerging in Oman’s power programme. Ibri 3 represents the first deployment of utility-scale battery storage in the sultanate, setting a precedent for integrating storage with future renewable projects. 

    In parallel, Nama PWP and Oman Environmental Services Holding Company (Beah) are preparing to tender the main contract for a 100MW waste-to-energy (WTE) project in Barka.

    Estimated to cost almost $1bn, the scheme would be Oman’s first major WTE facility and reflects broader efforts to embed circular-economy principles into the national infrastructure programme.

    Water sector

    The water sector recorded a solid year, with about $1bn in contract awards, although activity remained below 2024 levels.

    In March, China National Electric Engineering Corporation (CNEEC) won the main contract for a $200m deep-sea desalination project, heading a list of smaller wastewater and transmission packages awarded across 2025.

    Following the commissioning of the Barka 5 independent water project (IWP) and continued construction on the Ghubrah 3 IWP, planning attention has shifted to the next cycle of capacity.

    The next major scheme expected to move forward is a $150m desalination plant in Dhofar, with a planned capacity of 22 million imperial gallons a day.

    Rising water demand in Sharqiyah and Dhofar continues to guide long-term planning with more than $800m-worth of water transmission and treatment schemes set to be awarded in the near to medium terms.

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    Mark Dowdall
  • Local contractor wins Saudi substation deal

    3 December 2025

    Saudi Arabia-based Nesma Infrastructure & Technology has signed a contract with state-owned utility Saudi Electricity Company (SEC) to replace the Jubail Southeast 230/115/34.5kV substation.

    The project includes overhead transmission line (OHTL) works and is valued at more than SR840m ($224m). It is scheduled to be delivered within 20 months.

    The award forms part of SEC’s ongoing programme to upgrade ageing substations and reinforce network capacity in the Jubail industrial area.

    In September, local contractor Al-Fanar Projects was appointed to replace the Jubail Southwest 230/115KV substation, one of several transmission assets in the region undergoing phased renewal.

    As MEED recently reported, SEC has plans to invest SR220bn ($58.7bn) in power projects by 2030. This includes SR135bn ($36bn) and SR85bn ($22.7bn) for transmission and distribution, respectively.

    According to the utility, its planned upgrades will cover 130 high-voltage substations, 135,000 MVA of capacity, 12,900 kilometres of overhead transmission lines and 1,100km of underground cables.

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    Mark Dowdall
  • SEC signs $347m power works deal for Soudah Peaks

    3 December 2025

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    Saudi Electricity Company (SEC) has announced that its transmission subsidiary, National Grid, has signed a SR1.3bn ($347m) agreement with Soudah Development to deliver the electrical infrastructure for Saudi Arabia’s Soudah Peaks project.

    Soudah Peaks is a major high-altitude tourism and real estate development in the Asir mountains, led by Soudah Development, a wholly owned Public Investment Fund (PIF) company.

    The $7.7bn project includes hotels, resorts, residential units, entertainment facilities and outdoor activity zones at elevations of up to 3,000 metres. It will be developed over three phases, with full completion scheduled for 2033.

    Under the agreement, National Grid will develop a full integrated electrical network to support the project’s phased construction.

    The scope includes a central 380/132kV transmission substation with a capacity of 500MVA and two 13.8/132kV substations. The company will also build the electrical interconnection needed to supply all stages of the development.

    The first phase of the initiative will see the development of 454 residential units, 1,010 hotel keys and retail space with a gross leasable area of 20,625 square metres by 2027.

    The overall project includes the development of six main areas: Red Rock Mountain, Tahlal gateway to Soudah Peaks, Sahab, Sabrah, Jareen and Rijal.

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    Mark Dowdall