SINGAPORE: Kuwait expects to seal new deals to supply Chinese buyers with crude amid healthy demand for its exports in Asia, an oil official from the OPEC Gulf producer told Reuters.
The country also plans to export a new light crude grade by January, as well as spending $120 billion (SR450 billion) over the next five years on expanding both its upstream and downstream businesses, said Waleed Al-Bader, deputy managing director marketing at state-run Kuwait Petroleum Corporation (KPC).
“We see now very healthy refining margins ... this is mainly because of the past months of the OPEC cuts,” Al-Bader said in an interview at the KPC office in Singapore on Wednesday, referring to a push led by Organization of the Petroleum Exporting Countries to curb global crude supply.
“We see medium sour demand is very healthy and we have been approached by several customers for additional cargoes or for new contracts in China.”
The buyers include some small independent Chinese refiners, known as ‘teapots’, said Al-Bader, who was in China last week.
He added that there had been some “firm” enquiries from buyers, mainly for single initial shipments of 2 million barrels, with the potential for discussing term contracts for next year.
Kuwait also plans to start selling a new grade of crude called Kuwait Super Light from January, said Al-Bader. The new light sour grade has an API gravity of 47 and a sulfur content of 1.6 percent, Al-Bader said.
Production of the new grade could reach up to 120,000 barrels per day, he said, but the company is still studying the pricing mechanism for the grade.
The Gulf oil producer’s capital expenditure plan from 2017 until 2022-23 is $120 billion, with most spending planned for its upstream operations, he said.
Kuwait’s output capacity now stands at 3.2 million bpd, with the company aiming to boost that to around 3.3 million bpd by end of the next fiscal year. Kuwait has been pumping around 2.7 million bpd, sticking to it production target under the OPEC supply cut pact, Al-Bader said.
Al-Badr said that he expected OPEC to extend output cuts beyond March 2018, with KPC seeing oil prices in a range of $50-60 a barrel for next year.
Kuwait is also studying establishing a new firm to market refined oil products. The company would help Kuwait sell oil products mainly from its refining joint venture at Duqm in Oman.
“We have got the approvals ... on establishing the company. We have different options and scenarios and we are studying them,” Al-Bader said.
“Hopefully by end of this year, we will have a full report to present ... on how to move forward,” he said, adding that whether the new firm would be a joint venture with another international oil company or trading house, or would be wholly owned by KPC is still being studied.
Kuwait expects to seal new deals to supply oil to Chinese buyers
Kuwait expects to seal new deals to supply oil to Chinese buyers
Digital trade activities in UAE to grow by 12.3% annually
- Projected surge likely to be fueled by BNPL, fintech systems: report
RIYADH: Digital trade in the UAE is projected to grow at a compound annual rate of 12.3 percent from 2023 to 2028, fueled by the rise of “buy now, pay later” models and fintech systems.
A joint research paper, issued by the country’s Ministry of Economy and Abu Dhabi Chamber of Commerce and Industry, showed that more than 40 percent of consumers in the UAE rely on “buy now, pay later” models and fintech digital technology systems.
ADCCI CEO Ahmed Khalifa Al-Qubaisi said the research paper serves to strengthen his chamber’s position as a leading partner in the process of digital transformation in the business world.
“It aligns with the chamber’s strategy for digital transformation, aimed at attracting talent and expertise, exploring technological solutions, and integrating advanced AI technologies and tools such as Microsoft Copilot, into the current operational system at the Abu Dhabi Chamber,” he said.
Al-Qubaisi added this integration is intended to boost the level of productivity, improve the completion of daily tasks, increase customer satisfaction, and support the efforts of local and global businessmen and entrepreneurs.
He further said that the ADCCI continues its endeavors to enhance the quality of initiatives and projects dedicated to the private sector.
“The chamber employs various smart systems to analyze and process accurate data, as well as develop operational processes,” the CEO said.
He added that this approach aims to bolster sound decision-making and the formulation of effective strategic plans aligned with the aspirations of the business community in Abu Dhabi.
He noted that the paper provides a detailed overview of local, regional, and global regulatory frameworks and policies, key agreements, and the role of major international bodies such as the World Trade Organization in shaping the movement of traditional and digital trade and highlights new e-commerce practices that shape current trade dynamics.
The research paper revealed that about 49 percent of consumers in the UAE shop online frequently, with about 47 percent of the population relying on credit cards, which is much higher than the global average of 18 percent.
The research paper stated that it is expected that 20.1 percent of total global retail purchases will be completed online in 2024, while digital retail activity is expected to constitute around 25 percent of total global sales by 2027.
Saudi Arabia's top banks see 8% earnings surge to $5bn in Q1
RIYADH: Saudi Arabia’s top 10 listed banks saw their earnings surge by 8 percent in the first quarter of 2024, reaching SR18.65 billion ($5 billion) compared to the corresponding period of the previous year.
The increase in earnings can be attributed to several factors, including an 11 percent growth in lending and a rising interest rate environment that has heightened the cost of credit.
According to the latest data from the Saudi Central Bank, loans reached SR2.67 trillion by the end of March, with a growth rate surpassing deposits, which increased by 8 percent.
Meanwhile, research by Kamco Invest indicated that data from Gulf Cooperation Council central banks showed that, despite higher interest rates, outstanding credit facilities in the region continued to expand during the first quarter of 2024.
This growth was driven by widespread increases across all seven countries, highlighting the resilience of the financial sector. The robust expansion in lending reflects a broader trend of economic growth and investment within the Gulf region, demonstrating the strength and stability of its financial systems.
Their analysis showed that lending growth was strong compared to last year, with each country experiencing significant increases. This robust lending growth reflects a solid project pipeline, as aggregate contract awards in the GCC rose by 20.3 percent year-on-year, reaching $45 billion in the first quarter of 2024, up from $37.4 billion in the same period last year.
S&P Global forecasts robust credit growth for banks in the Kingdom, ranging between 8 to 9 percent in 2024. This expansion is expected to be driven by corporate lending, fueled by increased economic activities stemming from the Vision 2030 program.
In March, Moody’s Investors Service reaffirmed a positive outlook for Saudi Arabia’s banking sector. This endorsement was based on the Kingdom’s economic diversification programs and the growth of loans for low-risk government-backed projects. These initiatives are expected to enhance loan performance and contribute to robust profits in the banking sector.
Moody’s emphasized that Saudi Arabian banks anticipate a low nonperforming loan ratio and possess substantial loss-absorption capacity. Furthermore, their capital ratios rank among the highest in the Middle East region.
Furthermore, there is anticipation that the Saudi government and its affiliated entities will inject deposits into the banking system, thus providing additional support for the credit expansion of financial institutions in the Kingdom.
In this quarter, Saudi National Bank reported the highest earnings among the top 10 banks, reaching SR5.04 billion, followed by Al Rajhi Bank, which had earnings totaling SR4.41 billion.
According to Forbes 2024 MENA’s 30 most valuable banks list, Saudi Arabia accounted for a third of the entries, with 10 banks featured. Al Rajhi Bank continued to lead the list, with its market value increasing by $21.7 billion over the past 12 months to reach $96.6 billion.
Following closely, Saudi National Bank holds a market value of $68.2 billion.
Despite representing just 7 percent of the total revenues of listed banks in the first quarter, Alinma Bank’s growth significantly contributed to the overall increase. It experienced a 36 percent surge compared to the same period last year, reaching SR1.31 billion.
The bank attributed these positive results to increases in net income from financing and investment, banking service fees, income from evaluating investments at fair value, and other revenue streams.
According to S&P Global, Saudi banks are anticipated to adopt alternative funding strategies to manage the swift expansion in lending, driven by the increasing demand for new mortgages.
Even as the Saudi government and affiliated entities are poised to inject deposits into the banking system, Saudi banks are projected to persist in accessing international capital markets. This trend is expected to endure for the next three to five years.
Saudi Arabia’s PIF launches company to venture into space sector
RIYADH: Saudi Arabia’s space and satellite sector is set to receive a strategic boost with the Kingdom’s wealth fund establishing the Neo Space Group.
The wholly owned company of the Public Investment Fund aspires to become a national champion in the sector by developing local capabilities and boosting its strategic position within the growing global space economy, said a press release issued on Monday.
The group aims to develop and enhance commercial space operations in Saudi Arabia, providing innovative satellite and space solutions locally and globally.
Commenting on the development, Omar Al-Madhi, co-head of MENA Direct Investments at PIF, said: “The establishment of NSG marks an important milestone in the development of the growing satellite and space sector in Saudi Arabia and the ambition to be a leading commercial player in the global satellite sector.
“It is a unique milestone for PIF as it is PIF’s first investment focused on the space industry, which represents a series of new opportunities for the Saudi economy and private sector. It will also drive economic expansion in Saudi Arabia within several related strategic sectors while advancing the localization of vital industries.”
According to the press release, NSG will invest in local and international assets and capabilities, as well as promising venture capital opportunities, to catalyze the advancement and localization of sector-specific expertise.
The PIF company will contribute to the development and deployment of the latest cutting-edge technologies in the space industry through its four dedicated business segments: satellite communications, earth observation and remote sensing, satellite navigation and Internet of Things, as well as a satellite and space-focused venture capital fund.
The development of the aerospace sector is in line with PIF’s strategy to unlock the potential of promising sectors in Saudi Arabia and support the diversification of the Saudi economy, the growth of non-oil revenues and the realization of Saudi Vision 2030.
RCU, Ministry of Industry agree on new mechanism for granting mining licenses in AlUla
RIYADH: Mining projects in AlUla will soon undergo environmentally focused monitoring as the Royal Commission signed an agreement with the Ministry of Industry and Mineral Resources for granting licenses.
The new mechanism includes monitoring mining areas, complexes, and licenses, as well as sites of mineralized belts, reserve areas, and important mineral and ore locations within the governorate’s lands, the Saudi Press Agency reported.
As a prerequisite for issuing mining licenses, the mechanism stipulates that applicants within the Royal Commission of AlUla lands must submit an environmental impact study and develop a site rehabilitation and closure plan.
Companies are also required to preserve water sources, the environment, and wildlife, protecting them from violations and other environmental damage.
This aligns with RCU’s goal of working closely with partners and communities within Saudi Arabia and beyond to deliver an environmentally and historically sensitive transformation of AlUla.
Saudi Arabia’s non-oil sector to grow by 4.8% in 2024: Riyad Capital
RIYADH: Saudi Arabia’s non-oil sector is projected to grow at a rate of 4.8 percent in 2024, driven by the Kingdom’s growth-oriented fiscal policy, according to an analysis.
In its latest report, Riyad Capital stated that the sector will accelerate further in 2025, with a projected expansion rate of 5.2 percent.
“We project continued solid growth for non-oil activities, fostered by a growth-oriented fiscal policy with a focus on increased investment spending, which will spur growth in the coming years,” stated Riyad Capital.
This follows a trend where non-oil activities experienced a rise of 5.6 percent and 4.4 percent in 2022 and 2023, respectively.
Developing the sector is crucial for the Kingdom as it steadily pursues its Vision 2030 goals to reduce dependency on oil.
According to the report, Saudi Arabia's overall economic growth is poised to rebound in the coming years, with the nation's gross domestic product expected to expand by 2.3 percent in 2024 and accelerate to 5.8 percent in 2025.
The analysis projected that the Kingdom’s fiscal deficit could shrink to 3 percent and 1.8 percent of GDP in 2024 and 2025, respectively.
“After a surplus of 3.2 percent of GDP in 2023, we expect the current account balance to rise again to 3.7 percent of GDP in 2024. It will further expand to 4.9 percent of GDP in 2025 on the back of notably higher projected oil export revenues next year,” said Riyad Capital.
On the other hand, the inflation rate in the Kingdom is expected to decline to 2 percent in 2024 and witness a moderate acceleration to 2.4 percent in 2025.
Riyad Capital also expects Saudi Arabia’s oil production to reach more than 10 million barrels per day over the next 18 months.
“We expect oil production to expand again above 10 mbd in the course of the next 18 months, with the better part of this increase taking place in 2025. Therefore, the oil sector GDP contribution will still be mildly negative in 2024 with –2.2 percent, but record substantial growth of 8.7 percent in 2025,” said the report.
The analysis further pointed out that global oil prices are expected to remain volatile but at elevated levels, with Brent crude to fall in a range between $80 and $90 in 2024 and 2025.
