Logistics sector key pillar of economic diversification plan, says Saudi minister

A host of projects are planned to help achieve the strategy’s economic and social goals, including the launch of a second national airline. (Shutterstock)
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Updated 05 December 2021

Logistics sector key pillar of economic diversification plan, says Saudi minister

RIYADH: The transport and logistics sector represents one of the key pillars of the Kingdom’s economic diversification strategy, said Saudi Minister of Transport and Logistics Saleh Al-Jasser.
The minister highlighted the opportunities available in this sector in the Kingdom at the recent International Investment Summit held in Dhaka.
Al-Jasser said the Kingdom’s transport and logistics sector is undergoing rapid transformation. He highlighted the Kingdom’s National Transport and Logistics Strategy at the event, which was attended by investment companies and experts in the field.
Saudi Arabia expects its new transport and logistics strategy to generate SR550 billion ($150 billion) in investments by 2030 in areas such as public transport, railways, and airports expansion and development.
The government would provide 35 percent of the needed investments, and the rest would come from private investors. The strategy would have multiple benefits on economic activities because it would connect many sectors, such as Hajj and tourism, as well as industries.
A host of projects are planned to help achieve the strategy’s economic and social goals, including the launch of a second national airline, along with improved governance to enhance the work of the organizations involved. The new strategy also seeks to improve the capabilities of the Kingdom’s air cargo sector by doubling its capacity to more than 4.5 million tons. It includes a land bridge project that will span more than 1,300 km and connect the Kingdom’s ports on the coast of the Arabian Gulf with those on the Red Sea coast. It will have the capacity to transport more than 3 million passengers and 50 million tons of freight annually, opening up new opportunities in the areas it passes through.
Al-Jasser also visited the Chittagong Port, Bangladesh’s largest port, and held meetings with key officials to discuss ways to enhance cooperation in the sector.
Saudi investment
Saudi company Engineering Dimensions will invest $1.75 billion in Bangladesh, a Bangladesh official was quoted as saying by the local media.
Sirajul Islam, chairman of Bangladesh Investment Development Authority, said the Saudi company will jointly invest in two companies in the country.
Engineering Dimension has already invested in power generator production and a large scale cement factory.
Local media quoted Al-Jasser as saying many public and private companies of Saudi Arabia were keen to invest in Bangladesh in infrastructure development, power, port, energy and renewable energy sectors.


Airbus says it revokes Qatar order for 50 A321 jets as rift widens

Updated 19 sec ago

Airbus says it revokes Qatar order for 50 A321 jets as rift widens

PARIS: Airbus on Thursday raised the stakes in a dispute with one of its largest customers, Qatar Airways, over grounded and undelivered A350 jets by announcing it had revoked a separate contract for 50 smaller A321s the airline needs to open new routes.
The move is expected to deepen a dispute that moved closer toward a rare courtroom clash on Thursday, with a procedural hearing over Qatar’s claim for $600 million in compensation over A350 flaws pencilled in for the week of April 26 in London.
Airbus revealed it was walking away from the contract for A321neos in skeletal arguments presented during a scheduling session over the A350 dispute at a division of Britain’s High Court on Thursday, people familiar with the matter said.
“We confirm we did terminate the contract for 50 A321s with Qatar Airways in accordance with our rights,” an Airbus spokesman said following a filing setting out provisional arguments, reported earlier by Bloomberg News.
Qatar Airways is expected to fight the A321 contract’s termination, having said it plans to take delivery of the jets even though it is refusing to take more A350s until a dispute over surface erosion on the larger planes has been resolved.
The airline had no immediate comment on the A321 contract.
The A321 order stems from a deal first signed some 10 years ago which was then worth $4.6 billion at list prices. It was later modified to switch 10 of the A321s to a newer version.
Qatar Airways has said the A321s will help it launch flights to new markets where there is currently not enough demand for larger aircraft, but which are out of reach of smaller A320s.

The two companies have been locked in a row for months over A350 damage including blistered paint, cracked window frames or riveted areas and erosion of a layer of lightning protection.
Qatar Airways says its national regulator has ordered it to stop flying 21 out of its 53 A350 jets as problems appeared, prompting a bitter dispute with Airbus which has said that while it acknowledges technical problems, there is no safety issue.
Qatar Airways is seeking $618 million in compensation for the 21 grounded jets plus $4 million a day as the row drags on.
The Gulf carrier is also asking British judges to order France-based Airbus not to attempt to deliver any more of the jets until what it describes as a design defect has been fixed.
Airbus has said it will “deny in total” the complaint and has accused Qatar Airways, once one of its most highly courted customers, of mislabelling the problem as a safety concern.
It has indicated it will argue that state-owned Qatar Airways influenced its regulator to ground the jets to win compensation, while Qatar Airways has questioned the design and accuses Airbus of failing to produce studies, the people said.
Qatar Airways has said its local regulator is independently driving safety decisions and cannot evaluate the airworthiness of the affected jets without a deeper analysis from Airbus.
The European Union Aviation Safety Agency, which is responsible for the overall design but not the locally regulated airworthiness of individual planes in service, has said it has not so far found safety problems with A350s that it inspected.
Qatar is so far the only country to ground some of the jets.
But a Reuters investigation https://www.reuters.com/business/aerospace-defense/costly-airbus-paint-flaw-goes-wider-than-gulf-2021-11-29 in November revealed at least five other airlines had discovered paint or surface flaws since 2016, prompting Airbus to set up an internal task force before the Qatar row, and to explore a new A350 anti-lightning design.

World’s first hydrogen tanker to ship test cargo to Japan from Australia

Updated 8 min 29 sec ago

World’s first hydrogen tanker to ship test cargo to Japan from Australia

  • The hydrogen is cooled to minus 253 degrees Celsius (minus 423 Fahrenheit), liquefying it for export

MELBOURNE: A Japanese-Australian venture producing hydrogen from brown coal is set to start loading its maiden cargo on the world’s first liquid hydrogen carrier on Friday, in a test delayed by nearly a year because of the COVID-19 pandemic.
The Suiso Frontier, built by Japan’s Kawasaki Heavy Industries (KHI), arrived Australia this week from Kobe, following a longer trip than the expected 16 days as the ship dodged bad weather and rough seas, said a spokesperson for the Hydrogen Energy Supply Chain (HESC) venture. The ship is scheduled to head back to Japan in about a week.
Led by KHI, HESC is a A$500 million ($360 million) coal-to-hydrogen project backed by Japan and Australia as a way to switch to cleaner energy and cut carbon emissions.
Hydrogen, seen as a path to decarbonizing industries that rely on coal, gas and oil, is key to Japan’s goal to achieving net-zero emissions by 2050. Australia aims to become a major exporter of the fuel.
The Australian government on Friday committed a further A$7.5 million for HESC’s A$184 million pre-commercialization phase, and A$20 million for testing a capture and storage project for carbon dioxide released in the coal-to-hydrogen process to create a carbon neutral product.
Last year, HESC started extracting 70 kg of hydrogen a day from brown coal in the Latrobe Valley, about 135 km (84 miles) east of Melbourne, where brown coal mines have long fueled some of Australia’s most polluting power stations.
The hydrogen is produced by reacting coal with oxygen and steam under high heat and pressure. It is then trucked to a port site where it is cooled to minus 253 degrees Celsius (minus 423 Fahrenheit), liquefying it for export.
The partners are looking to produce up to 225,000 tons of hydrogen a year.
They will need to make a final investment decision by 2025, with Australia racing against countries in the Middle East and elsewhere to produce carbon neutral hydrogen, said Jeremy Stone, a director of J-Power, one of the HESC partners.
Partners in the project include Japan’s Electric Power Development Co, Iwatani Corp, Marubeni Corp., Sumitomo Corp. and Australia’s AGL Energy Ltd., whose mine is supplying the brown coal.


Microsoft buys game maker Activision Blizzard for about $70 billion

Updated 19 January 2022

Microsoft buys game maker Activision Blizzard for about $70 billion

  • Deal will turn Microsoft, maker of the Xbox gaming system, into one of the world’s largest video game companies
  • Microsoft CEO Satya Nadella vows to address issues of misconduct and unequal pay against Activision

RIYADH: Saudi Arabia’s sovereign wealth fund is set to see a $1.1 billion boost to its investment in Activision Blizzard after Microsoft agreed to buy the video game maker, Bloomberg reported.

The Public Investment Fund, which first started building a position at the end of 2020, owned about 37.9 million shares in Activision at the end of September, according to public filings.

The fund built its stake over the last three months of 2020 and the first half of 2021.

Microsoft will pay $95 a share in cash valuing the stake at $3.6 billion, up from $2.5 billion at Friday’s close.

If the deal is completed, it will help rescue PIF’s bet on the gaming publisher, whose shares had fallen more than a third from the time its investment was first reported to last week.

While filings don’t show the purchase price, if the fund paid the average price in each of those three quarters, its stake would’ve been acquired at an average of about $89 per share.

Microsoft is paying nearly $70 billion for Activision Blizzard, the maker of Candy Crush and Call of Duty, to boost its competitiveness in mobile gaming and virtual-reality technology.

The all-cash $68.7 billion deal will turn Microsoft, maker of the Xbox gaming system, into one of the world’s largest video game companies. It will also help it compete with tech rivals such as Meta, formerly Facebook, in creating immersive virtual worlds for both work and play.

If the deal survives scrutiny from US and European regulators in the coming months, it could be one of the biggest tech acquisitions in history. Dell bought data-storage company EMC in 2016 for around $60 billion.

Activision has been buffeted for months by allegations of misconduct and unequal pay. Microsoft CEO Satya Nadella addressed the issue Tuesday in a conference call with investors.

“The culture of our organization is my No. 1 priority,” Nadella said, adding that ”it’s critical for Activision Blizzard to drive forward” on its commitments to improve its workplace culture.

Activision disclosed last year it was being investigated by the Securities and Exchange Commission over complaints of workplace discrimination and in September settled claims brought by US workforce discrimination regulators. California’s civil rights agency sued the Santa Monica-based company in July, citing a “frat boy” culture that had become a “breeding ground for harassment and discrimination against women.”

Wall Street saw the acquisition as a big win for Activision Blizzard Inc. and its shares soared 25 percent in trading Tuesday, making up for losses over the past six months since California’s discrimination lawsuit was filed. Shares of Microsoft slipped about 2 percent.


Acquisition to push Microsoft past Nintendo as the third-largest video game company by global revenue, behind Playstation-maker Sony and Chinese tech giant Tencent

Last year, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, which is behind popular video games The Elder Scrolls, Doom and Fallout. Microsoft’s properties also include the hit game Minecraft after it bought Swedish game studio Mojang for $2.5 billion in 2014.

The Redmond, Washington, tech giant said the latest acquisitions will help beef up its Xbox Game Pass game subscription service while also accelerating its ambitions for the metaverse, a collection of virtual worlds envisioned as a next generation of the Internet. While Xbox already has its own game-making studio, the prospect of Microsoft controlling so much game content raised questions about whether the company could restrict Activision games from competing consoles, although Nadella promised the deal would help people play games “wherever, whenever and however they want.”

The acquisition would push Microsoft past Nintendo as the third-largest video game company by global revenue, behind Playstation-maker Sony and Chinese tech giant Tencent, according to Wedbush Securities analyst Daniel Ives.

“Microsoft needed to do an aggressive deal given their streaming ambitions and metaverse strategy,” Ives said. ”They’re the only game in town that can do a deal of this size with the other tech stalwarts under massive tech scrutiny.”

Meta, Google, Amazon and Apple have all attracted increasing attention from antitrust regulators in the US and Europe, but the Activision deal is so big that it will also likely put Microsoft into the regulatory spotlight, Ives said. Microsoft is already facing delays in its planned $16 billion acquisition of Massachusetts speech recognition company Nuance because of an investigation by British antitrust regulators.

Microsoft is able to make such a big all-cash purchase of Activision because of its success as a cloud computing provider. But after years of focusing on shoring up its business clients and products such as the Office suite of email and other work tools, Ives said Microsoft’s failed 2020 attempt to acquire social media platform TikTok may have “really whet the appetite for Nadella to do a big consumer acquisition.”

Pushback against the deal was immediate from consumer advocacy groups.

“No way should the Federal Trade Commission and the US Department of Justice permit this merger to proceed,” said a statement from Alex Harman, competition policy advocate for Public Citizen. “If Microsoft wants to bet on the ‘metaverse,’ it should invest in new technology, not swallow up a competitor.”


Activision was formed in 1979 by former employees of Atari Inc., a pioneer in arcade games and home video game consoles.

White House press secretary Jen Psaki had no comment on Microsoft’s announcement at her briefing Tuesday, but emphasized the Biden administration’s recent moves to strengthen enforcement against illegal and anticompetitive mergers.

Started in 1979 by former Atari Inc. employees, Activision has created or acquired many of the most popular video games, from Pitfall in the 1980s to Guitar Hero and the World of Warcraft franchise. Bobby Kotick, 59, has been CEO since 1991.

Microsoft said it expects the deal to close in its 2023 fiscal year, which starts in July. It said Kotick will continue to serve as CEO. After the deal closes, the Activision business unit would then report to Phil Spencer, who has led Microsoft’s Xbox division and will now serve as CEO of Microsoft Gaming.

Kotick survived a number of executive shakeups at Activision last year after a series of controversies stemming from allegations of a toxic workplace culture. A shareholder lawsuit in August said the company failed to disclose to investors that it was being investigated in California and that it had workplace culture issues that could result in legal problems.

Activision reached a deal in September with the US Equal Employment Opportunity Commission to settle claims that followed a nearly three-year investigation. The agency said Activision failed to take effective action after employees complained about sexual harassment, discriminated against pregnant employees and retaliated against employees who spoke out, including by firing them.

Microsoft has also been investigating its own practices toward sexual harassment and gender discrimination, opening an inquiry last week sought by investors at its annual shareholders meeting in November. The company committed to publishing a report later this year on how it handles harassment claims, including past allegations involving senior leaders such as co-founder Bill Gates.

Crude oil’s latest bull run puts spotlight on geopolitical events

Updated 19 January 2022

Crude oil’s latest bull run puts spotlight on geopolitical events

  • Having spent the last year fretting over supply, markets and investors appear suddenly more spooked by the ‘what ifs’ of global politics and its impact on still tight supplies

LONDON: Crude oil’s latest bull run, which saw Brent climb to its highest level since 2014 on Tuesday, has put geopolitics front and center of market concerns.

Having spent the last year fretting over supply, markets and investors appear suddenly more spooked by the what ifs of global politics and its impact on still tight supplies.

This week’s drone attack by Iranian-backed Houthi rebels on the UAE, along with fears that Russia’s aggression towards neighboring Ukraine will lead to war, are nudging crude prices higher. The spike comes despite a view in some circles that supply issues are abating when compared to last year. A consensus view from energy analysts suggests current geopolitical events, primarily increased Middle East tensions and Russia’s saber-rattling, have added almost 12 percent to the price of a barrel of crude oil.

Alan Gelder, vice president for refining, chemicals and oil markets with UK energy consultant Wood Mackenzie, said: “Broadly speaking, geopolitics currently accounts for around $10 of the oil price.” Following the UAE attack, Goldman Sachs upwardly revised its price forecast, warning on Tuesday that Brent could reach $90 per barrel in the next two months and hit $100 in the second half of this year. However, Gelder believes triple figure oil prices could prove wide of the mark.

He told Arab News: “We don’t believe the oil market will be as tight in 2022 as it was in 2021. We’re expecting US oil production to grow because the investment discipline of recent years will now enable companies to drill and increase investment supply while still achieving high returns for investors.”

He added: “One can never say never, but we think forecasts of $100 oil are slightly overrated. The rig count is increasing in the US, albeit modestly, so supply will increase this year. Geopolitical events are of course hard to predict and are capable of causing further price shocks, though it would take an extreme production outrage at a major supplier for the current fundamentals of supply and demand to be impacted.” That said, it is worth remembering geopolitical events were behind the first big jump in oil prices last year.

In March 2021, just after OPEC and its OPEC+ allies announced they would stick to their production cuts, the Houthi militia launched a failed attack on Saudi Arabia’s Ras Tanura oil-export terminals and refinery. 


A consensus view from energy analysts suggests current geopolitical events, primarily increased Middle East tensions and Russia’s saber-rattling, have added almost 12 percent to the price of a barrel of crude oil.

There was no damage to Ras Tanura, but the attack sent Brent crude briefly above $70 a barrel.

The six-year war in Yemen, where Saudi Arabia is leading a coalition of countries fighting the Iran-backed Houthis, has seen a number of attacks on the Kingdom’s energy infrastructure and oil tankers in the Red Sea and the Persian Gulf.

Indeed, a report last month by a respected Washington-based think tank, the Center for Strategic and International Studies, said Houthi attacks on Saudi Arabia more than doubled during the first nine months of 2021 compared to the same period a year earlier. The report said Iran’s Islamic Revolutionary Guard Corps and Lebanese militia Hezbollah played a critical role in providing Houthis with weapons, technology and training.

Concerns about potential disruptions to Saudi output on prices should also be coupled with the unlikelihood of any easing of sanctions against Iran — a huge crude producer, but one whose meager exports are now reliant on smuggling.

Fast forward to today, and the bloody unrest in Kazakhstan — an OPEC+ member and second largest oil producer in the former Soviet Union with almost 2 million barrels a day — had already pushed Brent almost 5 percent higher in the early days of this month, to $83. Ironically, the initial protests against the government were sparked by an increase in the price of liquid petroleum gas, which many Kazakhs use to run their cars.

The UAE attack, which has nudged Brent a little closer towards Goldman Sachs’ $90, is the most significant strike by Houthis against the Emirates since its military withdrawal from the Yemen conflict in 2019, though it still supports forces fighting the Houthis.

Meanwhile, the buildup of Russian troops on Ukraine’s border and fears that Vladimir Putin will invade, unleashing a NATO response of economic sanctions, or in a worse case scenario, a wider conflict, are sending prices higher still.

Tensions linked to Gazprom’s Nord Stream 2 pipeline project have already played a large role in rocketing gas prices across Europe. Gas prices have fallen sharply so far this year, but Ukraine is a vital supply route for Russian oil and gas supplies to Europe, which is heavily dependent on Russia for its energy needs.

Giovanni Staunovo, energy strategist with UBS, said: “There is probably also a geopolitical risk premium related to tensions in Eastern Europe and the Middle East, which is however difficult to quantify. Historically, such risk premia only remained in the price if those tensions triggered some supply disruptions. That said, currently there are no disruptions.”

A more pertinent risk for oil prices perhaps lies in the fundamentals of the market, primarily concerns about OPEC’s ability to pump more crude if required by higher demand. Several OPEC members have struggled to raise output to required quota levels, and speaking this week, Saudi Arabia Energy Minister Prince Abdulaziz bin Salman said the Kingdom had no plans to make up for their production shortfalls.

Staunovo said: “Some oil demand concerns related to the omicron variant have not materialized, with oil demand holding up better than some feared back in December. But the oil market is tight, with petroleum inventories, and crude and oil products, standing at a multi-year low, and if oil demand keeps recovering back to 2019 levels, available spare capacity should also fall to low levels, which makes the oil market and prices very sensitive to any supply disruptions.”

South Korea seeks to boost clean energy efforts with UAE cooperation

Updated 17 January 2022

South Korea seeks to boost clean energy efforts with UAE cooperation

  • Seoul and Abu Dhabi reach landmark $3.5 billion defense agreement — largest in South Korea’s arms history
  • President Moon Jae-in scheduled to travel to Saudi Arabia on Tuesday

SEOUL: South Korea is seeking to increase hydrogen cooperation with the UAE in a bid for a sustainable future and carbon neutrality, President Moon Jae-in said on Monday in Abu Dhabi during his Middle East tour to explore business opportunities in the region.

Moon arrived in the UAE on Saturday for a three-day visit as part of his week-long Middle East trip. From Abu Dhabi he will fly for talks in Riyadh.

“Through hydrogen cooperation between the UAE and Korea, I hope that we can move forward in a sustainable future and carbon neutrality,” he said while addressing the Abu Dhabi Sustainability Week.

As South Korea wants to achieve carbon neutrality by 2050, Moon said Seoul wants to bolster cooperation with the UAE in the development of carbon-capture technologies to create what is known as blue hydrogen — a form of the fuel obtained from natural gas in a process that stops carbon emissions from being released into the atmosphere.

The UAE is one of the world’s foremost pioneers in the field.

Prof. Jung Sang-ryul of the Institute of Middle Eastern Affairs at Myungji University in Seoul told Arab News that with UAE-Korean hydrogen cooperation, the industry “can make a greater leap forward.

“The hydrogen industry is a field for future cooperation,” he said. “The UAE has strengths in the production of green and blue hydrogen, whereas South Korea (has) in utilization, storage and distribution, including hydrogen-powered vehicles, charging stations, fuel cells and liquid transportation.”

During Moon’s visit, Seoul and Abu Dhabi also reached a landmark $3.5 billion defense agreement on Sunday, under which the UAE will purchase KM-SAM surface-to-air-missiles, known as Cheongung II. It is the largest deal in the history of South Korea’s arm exports.

“The UAE is the first foreign nation to operate the Cheongung II,” Kang Eun-ho, commissioner of the Defense Acquisition Program Administration, Seoul’s arms procurement agency, said in a statement. “The deal is the result of the bilateral defense cooperation based on mutual trust and will serve as a watershed moment for the two nation’s strategic defense partnership.”

The KM-SAM was developed with technical support from Russia to replace the older Hawk surface-to-air missiles that had been in service in 1964. Equipped with a multi-function phased array 3D radar, the interceptor can “hit-to-kill” hostile missiles coming in at altitudes below 40 km.

On the sidelines of the missile acquisition contract, the two countries also signed a memorandum of understanding on collaboration in defense technologies, including the potential development of weapons systems.

The UAE is South Korea’s top export market and biggest partner in human resource exchanges in the Middle East.

South Korean firms have participated in the development of Emirati oil fields and the Barakah nuclear power plant — the first nuclear power station in the Arabian Peninsula, which started operations last year.

On Tuesday, the South Korean president will continue his trip to Saudi Arabia.

His office said in a statement that Moon is scheduled to meet Crown Prince Mohammed bin Salman.

“The leaders of the two nations are expected to discuss energy and infrastructure, as well as health care, science and technology, hydrogen, intellectual property and education,”the office said.

On Wednesday, Moon is scheduled to meet Gulf Cooperation Council secretary-general Nayef bin Falah Al-Hajraf to discuss the resumption of negotiations for a free trade agreement between Seoul and GCC.

South Korea and the GCC started talks on a free trade deal in 2007, but negotiations had stalled and were suspended in 2010.