SEOUL: South Korea may have won an exemption from the US to continue Iranian oil imports, but major construction companies here are still reeling from the renewed American sanctions against Tehran.
Hyundai Engineering & Construction (E&C), a business arm of Hyundai Group, announced on Oct. 29 that it had scrapped a deal with Iran’s Ahdaf Investment Co. to build a petroleum refining facility in Iran.
The deal was worth $520 million — about 15 percent of the $3.4 billion construction project led by Hyundai Engineering consortium. Hyundai Engineering is an infrastructure unit owned by Hyundai Motor Group.
“We had no choice but to cancel the deal,” Yum Dong-yeon, a spokesman for Hyundai E&C, told Arab News. “We’re just sorry to lose the deal, and it is difficult now to anticipate if and when we will be able to be engaged in Iran businesses again.”
The remaining project led by Hyundai Engineering is expected to be nullified.
“It’s impossible now to carry out the deal, as a grace period of the preliminary contract has already expired,” a Hyundai Engineering public affairs official said, asking not to be named.
SK Engineering & Construction (E&C) has also been hit by the renewal of US sanctions against Iran. The firm, affiliated with South Korea’s third largest conglomerate SK Group, signed a $1.6 billion preliminary contract last year to upgrade a refinery in Tabriz, some 600 kilometers northwest of Tehran.
The firm also bagged a $3.6 billion contract to build and operate new power plants in Iran under a joint project with Turkey’s UNIT International. The contract is Iran’s largest private energy project, to produce combined generation capacity of 5,000 megawatts.
“We have yet to enter main contracts with Iranian counterparts, so we haven’t suffered any financial loss at the moment,” said Yeom Suk-bae, a senior communications manager at SK E&C. “However, it’s a setback obviously to our plan to make inroads into Iran, a new and growing market in the Middle East.”
Daelim Industrial is also one of the South Korean construction firms that have canceled projects in Iran. The company revoked a $2 billion deal in June with an Iranian oil refining company.
Kim Jong-gook, head of the Middle East and Africa business bureau at the International Contractors Association of Korea, painted a grim picture of South Korean construction projects in Iran in the long-term.
“South Korean construction firms have already been affected by the feud between the United States and Iran before the sanctions come into force,” Kim said.
The restored US sanctions, focused on banning any financial transaction with Iran, would hinder South Korean firms from going ahead with any contract with Tehran, he said.
“For South Korean construction companies, Iran is regarded as a new market with great potential,” Kim said. “As Iran’s oil exports are to be reduced in the aftermath of the restored US sanctions, energy corporations of the Middle East nation will likely suffer the shortage of foreign exchange, which will lead to the shrinkage of their construction projects.”
Oil refineries and petrochemical firms in South Korea breathed a sigh of relief about the “temporary waiver” for Iranian oil imports, but braced for risks down the road.
As one of the eight countries exempted from the US sanctions, South Korea is allowed to buy Iranian oil over the next six months on the condition that the imports volume should be reduced significantly. Any payment must be made through a bilateral Korean won currency account.
The South Korean government did not disclose the scale of reduction in Iranian oil imports, but oil refinery industry sources estimate that they are allowed to import about 4 million barrels per month, more than half of last year’s imports volume. South Korea imported an average of 12 million barrels per month of crude and condensate from Iran last year, according to the state-run Korea National Oil Corp.
South Korea in particular is a large buyer of Iranian condensate, a super light form of crude oil used by its large petrochemical industry. Of the Iranian oil imported last year, condensate accounted for some 70 percent.
“We’re trying to diversify sources of oil imports in the wake of Iran sanctions, but it’s not so easy to find alternatives for condensate,” an official of SK Innovation, the largest petrochemical company in South Korea, said on condition of anonymity.
Amid a sharp drop in imports from Iran, Qatar has emerged as the biggest export of condensate to South Korea, according to the Korea Petroleum Association. Qatar accounted for slightly more than 80 percent of South Korean condensate imports in September, with other countries such as Nigeria, Norway and Libya being considered as alternative sources.
The South Korean government is seeking to come up with measures to minimize the impact of the US sanctions on Iran.
“We’ll keep discussing with the United States and Iran over measures related to the sanctions and their effects on the Korean industry,” said Kim Jang-hee, head of the Ministry of Trade, Industry and Energy’s Americas Division.
South Korean construction firms hit hard by Iran sanctions
South Korean construction firms hit hard by Iran sanctions
- Seoul imports about 12m barrels per month of oil from Iran.
- Contractors feel impact of sanctions on overseas orders.
Oil Updates – crude set for weekly gain as demand signs, geopolitics seen as positives
SINGAPORE: Oil rose on Friday, set for a weekly gain, as data this week from the US and China, the world’s two largest crude users, pointed to higher demand and continuing uncertainty over the Gaza war supported prices, according to Reuters.
Falling US crude inventories spurred by higher refinery runs coincided with data released on Thursday showing China’s oil imports in April were higher than last year on signs of improving trade activity.
Negotiations to halt the fighting between Israel and Hamas have yielded no results, keeping alive concerns of potential Middle East supply disruptions.
Brent futures rose 58 cents, or 0.6 percent, to $84.41 a barrel 8:14 a.m. Saudi time and are set for a weekly gain of 1.7 percent. US West Texas Intermediate crude climbed 58 cents, or 0.7 percent, to $79.84, set for a weekly increase of 2.2 percent.
China’s exports and imports returned to growth in April after contracting in the previous month, signalling an improvement in demand.
“Ongoing signs of strength in demand in China should see commodity market remain well supported,” ANZ Research said in a note.
Israeli forces bombarded the city of Rafah in the Gaza Strip on Thursday, Palestinian residents said on Thursday, while an Israeli official said indirect negotiations with Hamas had ended. As the conflict continues, it raises the potential for other Middle Eastern countries to become involved, particularly Hamas’ main supporter Iran, a key producer.
“Israel’s groundwork for an intervention in Rafah and growing tensions on its Northern border are a reminder that geopolitical risks could persist through all of Q2 2024, at least,” Citi analysts said in a note.
Still, the bank’s analysts see prices easing through 2024, with Brent averaging $86 a barrel in the second quarter and $74 in the third quarter amid looser supply and demand fundamentals as there are signs that global oil demand growth “appears to be moderating.”
How a Saudi start-up hopes to beat sickle cell disease with an AI-trained gene-editing biorobot
- Sickle cell disease is a genetic blood disorder in which red blood cells are crescent shaped and rigid
- Riyadh-based NanoPalm is combining AI-trained models and nanotechnology to remove faulty genes
RIYADH: Saudi-based biotechnology company NanoPalm is developing a biorobot using a unique blend of artificial intelligence, nanotechnology, and gene therapy to find a solution for patients with sickle cell disease.
Affecting approximately 20 million people worldwide, sickle cell disease is a genetic blood disorder in which red blood cells are crescent shaped and rigid. Patients with sickle cell experience blocked blood vessels, pain, fatigue, and anemia, impacting their well-being.
Founded in 2022, and headquartered in Riyadh, NanoPalm began life at the King Abdulaziz City for Science and Technology (KACST) before it was incubated by the NextEra initiative.
The biotechnology company is run by the Ministry of Communication and Information Technology in partnership with The Garage — once a car park, now a 28,000-square-meter space that can accommodate 300 startups.
Ali Al-Hasan and Samar Al-Sudir, the founders of NanoPalm, have used their expertise to develop a product that goes beyond treating the symptoms of sickle cell. Their aim is to remove the gene from a patient’s body altogether.
With Al-Hasan’s knowledge of nanomedicine and Al-Sudir’s background in chemistry, the pair were able to bring their combined expertise to bear.
The NanoPalm team spent more than a year collecting data to feed into artificial intelligence models, Al-Hasan told Arab News.
“We explored AI and we found it was a long journey where we needed to create our own data and generate the data that will be used to train AI models,” he said.
“It will predict the best gene therapy and predict its safety, its effectiveness, and cut down the duration of the therapy, while making it affordable.
“Discovery is at the heart of any drug development process in any pharma company. Now it has become digitized and AI enabled.”
In the development of their product, NanoPalm uses three technologies: AI to model and predict, nanotechnology to create the medicine, and gene therapy to edit genetic material.
“We use the manufacturing recipe from the AI and then go to the lab to build a lipid biorobot,” said Al-Hasan.
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“It’s like a vehicle. And those lipid biorobots encapsulate genetic materials such as mRNA and other RNA molecules, which act like scissors to remove the gene that we want to remove.
“When patients come to the clinic, they usually get an IV infusion of biorobots encapsulating genetic materials for four hours and then go home. The biorobots will then navigate their body and find where the disease is. They go after cells responsible for sickle cell.”
NanoPalm has set out to revolutionize the biotech industry. Al-Hasan said the company’s mission is to make treatment more cost-effective.
“As we dove into this problem, we found two important facts,” he said. “Sickle cell disease is not the only genetic disease. There are 6,000 other genetic diseases that have no known cures.
“The second problem is that the current gene therapies are ineffective. They are super expensive. The patients would have to be rich to afford gene therapies, for example, because sickle cell patients would have to pay $2.2 million to get one injection.”
NanoPalm is collaborating with KACST, King Saud University, and the National Guard Hospital to treat 15 sickle cell patients from Saudi Arabia.
Al-Hasan says some 42,000 Saudis stand to benefit from NanoPalm’s product when it is launched in 2030.
China’s exports and imports return to growth
- Shipments from the country grew 1.5 percent last month by value: data
RIYADH: China’s exports and imports returned to growth in April after contracting in the previous month, signaling an encouraging improvement in demand at home and overseas.
The data suggests a flurry of policy support measures over the past several months may be helping to stabilize fragile investor and consumer confidence.
Shipments from China grew 1.5 percent year on year last month by value, customs data showed on Thursday, in line with the increase forecast in a Reuters poll of economists. They fell 7.5 percent in March, which marked the first contraction since November.
Imports for April increased 8.4 percent, beating an expected 4.8 percent rise and reversing a 1.9 percent fall in March.
“Export values returned to growth from contraction last month, but this was mainly due to a lower base for comparison,” said Huang Zichun, China economist at Capital Economics.
“After accounting for changes in export prices and for seasonality, we estimate that export volumes remained broadly unchanged from March,” she added.
In Q1, both imports and exports rose 1.5 percent year on year, buoyed by better-than-expected trade data over the January-February period. But the weak March figures prompted concerns that momentum could be faltering again.
Crude oil imports
China’s crude oil imports rose on the previous year in April, as refiners prepared for a fully recovered Labor Day holiday travel season, official data showed on Thursday.
Crude imports in April totaled 44.72 million tonnes, or about 10.88 million barrels per day, according to data from the General Administration of Customs.
That represented a 5.45 percent increase from the relatively low 10.4 million bpd imported in April 2023.
China saw more than 1.3 billion passenger trips over the five day Labor Day holiday that began on May 1, up 2.1 percent from a year earlier, state media outlet Xinhua reported.
Highway traffic was up 2.1 percent while air trips surged 8.1 percent, Xinhua said.
Domestic airline seat capacity in April was up 1.3 percent on last year, data from consultancy OAG showed.
China’s manufacturing sector continued to see muted recovery in April.
Natural gas imports for April rose 14.7 percent from a year earlier to 10.30 million tonnes, data showed.
Prices of liquefied natural gas for Asia at the end of April were down 11.3 percent on the same period last year, and down 43 percent from last year’s peak in October.
Customs data also showed exports of refined oil products, which include diesel, gasoline, aviation fuel and marine fuel, were up 21.46 percent from a year earlier at 4.55 million tonnes.
Coal imports
China’s coal imports rose in April fueled by lower domestic production and greater buying by power generators to swell stockpiles ahead of the peak summer demand season.
Shipments of coal into the world’s largest consumer of the fuel were 45.25 million tonnes last month, up 11 percent from 40.68 million a year earlier.
That was up by 9.4 percent from March and 2 million tonnes less than December’s record of 47.3 million tonnes.
The boost in imports is partly because domestic coal production has not increased to meet demand, said Feng Dongbin, an analyst with consulting firm Fenwei.
China’s coal output fell 4 percent on the year during the first quarter, the most recent data shows, in part because of a string of deadly accidents that forced mines in the top coal-producing province of Shanxi to halt operations for safety inspections.
Saudi bourse among top 10 in the world in terms of market cap, says official
RIYADH: Saudi Tadawul Group finds itself in a “fortunate” position amid the Kingdom’s rapidly growing industries, said a senior executive.
On the sidelines of the Capital Market Forum 2024 held in Hong Kong, Nayef Al-Athel, group chief of sales and marketing officer at Tadawul Group, highlighted the company’s aim to attract global investors by sharing compelling success stories at international forums.
Speaking to Arab News, Al-Athel explained the dual nature of the group’s goals, emphasizing commercial targets focused on maximizing revenues as a listed company.
He said: “I think we are very fortunate as a capital markets group, fortunate in the sense that a lot is going on in the Kingdom. There’s unbelievable momentum in various facets of this country, and we are fortunate to be at the juncture of spillover from all these industries and all these new sectors being unraveled and unveiled in Saudi Arabia.”
Al-Athel added: “The story of the Kingdom of Saudi Arabia is very attractive, and that attraction then translates to us being very attractive as a capital market.”
Additionally, he emphasized Saudi Arabia’s geographic and time zone position, acting as a bridge between the East and West.
“If you take that from a geographical standpoint, time zone perspective, that can be straightforwardly translated into capital markets narratives of connecting East to West,” Al-Athel said.
He added: “If you look at the conference that we’re in here at CMF Hong Kong, it’s literally an attempt, which we think is very successful of us, connecting East to West.”
Commenting on his statement from the previous CMF in February held in Riyadh, Al-Athel explained how Tadawul Group is at the forefront of global capital market leaders.
“We are a top 10 stock exchange when it comes to market cap, to continue to propel ourselves high incomes to market cap rankings. That, of course, means more IPOs and more capital market transactions, more interest from investors all over the world,” he said.
Al-Athel further explained that the group’s success is building itself as an equity capital market powerhouse in Saudi Arabia, particularly through a significant number of IPOs in recent years. There’s a focus on expanding into debt capital markets and derivatives to diversify their offerings.
“We’ve worked hard on building ourselves as an equity capital market powerhouse. The number of IPOs has been staggering over the last three to four years in the Kingdom,” Al-Athel stated.
However, he mentioned that there are currently no specific announcements to make.
“We’re living in a very exciting situation as we speak, hosting 300 investors from 44 companies at the Capital Market Forum in Hong Kong,” said Al-Athel, adding that it’s the first cross-border capital market event, with participation from entities in Saudi such as the CMA and the Ministry of Investment.
He continued: “This is the flavor of where we are at the moment. This is where we are focused. Again, for sure there will be activity in the foreseeable future.”
Furthermore, Al-Athel mentioned that the group has celebrated 400 securities listed on Tadawul.
“Among those 400 listed securities, we find many success stories, and those success stories do sell themselves internationally. We have more than 22 companies traveling with us to Hong Kong, and the sole purpose of those companies, the Saudi corporates, is to tell their success stories to investors from Asia.
Al-Athel concluded his statement by highlighting the significant transformation undergone by the capital market, particularly with the achievement of 400 listed securities and a diverse investor base spanning Saudi Arabia, the region, and globally.
He noted that the rise in institutional investment and increasing numbers of IPOs signal a healthy market environment.
Al Rajhi Bank launches $1bn in perpetual bonds, says document
RIYADH: Al Rajhi Bank, the world’s largest Islamic bank by assets and market capitalization, has launched $1 billion in Additional Tier 1 sustainable sukuk, or Islamic bonds, a document from one of the banks arranging the deal revealed on Thursday.
The final yield for the debt transaction was set at 6.375 percent, tighter than the initial guidance of around 6.875 percent released in a document earlier in the day. The notes are perpetual in nature and can first be redeemed in May 2029.
The deal received more than $3.5 billion in orders and allocation is expected to happen later in the day, the document showed.
AT1 bonds, the riskiest debt instruments banks can issue, are designed to be perpetual in nature, but lenders can call them after a specified period.
