Month: February 2025

Fitch, one of three influential ratings agencies, has placed Bahrain on a negative outlook amid growing concerns over increasing debt, low levels of foreign currency and high budget deficits.

Debt is projected to rise from 130 percent in 2024 to 136 percent of GDP in 2026 “with a continued upward trajectory over the medium term”, the agency said, while interest payments are expected to account for one-third of revenue in 2025, up from 22 percent in 2019.

The country’s rating remains at B+, which is four steps below investment grade, Fitch said on Monday.

In January public debt increased to almost BHD18 billion ($48 billion), the country’s ministry of finance said last month.

Bahrain, the smallest country in the GCC bloc of six with a population of almost 1.5 million people, has dwindling reserves of oil and gas. It is partially reliant on revenues from the Abu Safah field it shares with Saudi Arabia and requires an oil price of about $125 per barrel to achieve budgetary equilibrium.

Earlier this year, a deal between Aluminium Bahrain (Alba), a major industrial player on the archipelago, and Saudi Arabia’s Ma’aden was abruptly called off “by mutual consent”. Global bank HSBC also announced plans to cease operations in Bahrain last week.

Fitch predicts oil prices of $70 per barrel this year, with a further drop to $65 next year, although production in Bahrain will increase following the completion of large-scale upgrades at the Bapco refinery, which will take output up to 380,000 barrels per day.

Non-oil revenue is forecast to increase to 8.8 percent this year and 9 percent in 2026, fuelled by a 15 percent tax on multinational companies, which was introduced in January and will be collected from the third quarter of the year.

Despite the outlook, Bahrain can still call on the support of its GCC neighbours – in 2018 Bahrain was promised $10 billion in zero-interest loans by Saudi Arabia, the UAE and Kuwait.

“In Fitch’s view, absent strong reforms, Bahrain could require a substantial increase in GCC concessional funding to stabilise and reduce debt,” the report said. “Our base case is that Bahrain would be able to obtain this funding from GCC partners.”

Source:https://www.agbi.com/economy/2025/02/fitch-lowers-bahrain-outlook-on-rising-debt-levels/

Man has gone there before, but for the Gulf Arab states the space race is only just picking up.

Led primarily by the UAE and Saudi Arabia, Middle Eastern countries have spent $25 billion on satellites and other space projects and equipment over the past decade. That number is expected to triple to $75 billion by 2032, according to satellite consulting company Euroconsult.

Many, such as Saudi Arabia, have outlined ambitious space investment plans in their various economic and social strategies such as Vision 2030.

“In the GCC countries, we are definitely seeing a rapid surge, not only in satellites, but also in the whole space industry,” said Fred Liebler, principal at global consultancy group FTI Delta.

Technological breakthroughs mean it is much cheaper to build and launch satellites these days. For instance, it costs around $1,200 per kg on a SpaceX Falcon 9 rocket for a payload satellite.

Satellites serve a variety of purposes, such as the capture of high-resolution images of the Earth’s surface in all weather and lighting conditions, which can be used for disaster response, vessel tracking, environmental monitoring, defence and infrastructure analysis.

Gulf demand for these kinds of satellites is growing in both the state and private sectors.

“There has been a rapid demand surge for Earth observation because you can actually have great commercial applications,” Liebler said.

Earth observation, combined with the use of artificial intelligence, is a prime area of focus for startups and bigger companies alike.

“Even universities now here in the Middle East are developing their own satellites that are being launched,” Liebler said.

Given the growth in the industry, some Arab countries plan to create manufacturing hubs and launch capabilities through partnerships. Oman, for instance, has committed to developing its own space economic zone.

“If you look at the ‘Visions’ from the Gulf countries, the idea is to localise the whole value chain, including the launch of satellites,” Liebler said.

One company, Finnish microsatellite manufacturer and operator Iceye, expects to build nearly a hundred satellites in the coming years for customers in the Gulf through a partnership in the region.

Iceye and Abu Dhabi-based Space42 announced a joint venture in December to manufacture synthetic aperture radar satellites in the UAE.

“We’ve got a programme where we’re building seven [satellites] together and the majority of those are being built in the UAE,” Rafal Modrzewski, CEO and co-founder of Iceye, told AGBI.

He said manufacturing could reach “just over 100” in a few years’ time.

“We see a lot of interest across different partners in the region,” Modrzewski said. “It’s not an interest to buy one or two satellites; it’s an interest to buy 10, 20, 30, sometimes even 50 satellites.”

The cost of building the satellites has plunged. A few years ago that might have cost more than $200 million, but Iceye can do it for $20 million, Modrzewski said.

Gulf government demand for satellites is primarily driven by security needs and the risks presented by natural disasters.

Iceye, for instance, tracked the heaviest rains on record in the UAE last year, which caused widespread flooding and more than $8.5 billion of physical and economic damage, according to re-insurer Gallagher Re.

“We cover one flood a week now,” he said, adding that the company works with large insurance companies to provide near real-time insights.

Iceye has raised more than $500 million in funding since it was founded in 2014. Its investors include Finnish sovereign wealth fund Solidium Oy, US investment group BlackRock and venture capital firm Seraphim Capital.

Modrzewski said there has been “significant” investment from the Middle East but he declines to give details.

Source:https://www.agbi.com/space/2025/02/why-gulf-demand-for-satellites-is-taking-off/

British oil company BP has finalised an agreement with the Iraqi government to redevelop four oil and gas fields in the northern Kirkuk region.

BP is expected to invest up to $25 billion in the project over its lifetime, according to previous reports.

The deal aims to rejuvenate Iraq’s oil production capacity. It also aligns with BP’s renewed focus on fossil fuels.

The agreement, which is subject to final ratification by Iraq’s government, includes the Baba and Avanah domes of the Kirkuk oil field, along with the Bai Hassan, Jambur and Khabbaz fields, all currently operated by Iraq’s National Oil Company (NOC).

BP’s investment will target the rehabilitation of existing facilities, initiation of new drilling programmes, and development of natural gas resources, BP said in a statement this week. Iraq needs the gas to power electricity generation.

The agreement is for an initial phase and includes oil and gas production of more than three billion barrels of oil equivalent (boe). That could rise to up to 20 billion boe.

The deal is part of Iraq’s strategy to revitalise its oil industry after years of prolonged conflict and infrastructural decay.

The project is expected to start this year, with BP working with NOC and North Gas Company and a new operator to stabilise production.

Iraq, the second-largest Opec’s oil producer after Saudi Arabia, has a production capacity of almost 5 million barrels per day (bpd) and plans to increase it to 6 million by 2028.

Kirkuk has proven to be problematic to develop since at least 2003, although it is one of the oldest and largest oilfields in the world. Kirkuk is disputed by elements in Iraqi Kurdistan.

BP said the remuneration will be linked to incremental production volumes, price and costs. The company will be able to book a share of production and reserves proportionate to the fees it earns to help increase production.

BP was part of a group which discovered oil in Kirkuk in the 1920s but withdrew from the country in the early 1970s along with other international oil companies due to the nationalisation of Iraq’s oil industry.

It re-entered Iraq in 2009 – after the2003 US-led invasion – as the first international major returning to the country with a technical contract on the Rumaila oilfield in southern Iraq, where it has a 50 percent stake in a joint venture.

In 2023 the French major TotalEnergies signed a $10 billion agreement to develop the Gas Growth Integrated Project in the south of Iraq to decrease gas flaring, develop a solar plant and build a long-delayed seawater desalination plant to reinject water into ageing fields.

Source:https://www.agbi.com/energy/2025/02/bp-to-develop-iraq-oil-fields-at-potential-cost-of-25bn/

Abu Dhabi’s state-owned Adnoc Gas has signed a fourth sales and purchase agreement for its Ruwais liquefied natural gas project, which is under development at Al Ruwais Industrial City.

Adnoc Gas signed the 15-year contract with one of Japan’s utility companies, Osaka Gas, to supply up to 800,000 tonnes of LNG per year, Adnoc said in a statement.

Under the agreement, LNG cargoes will be shipped to the destination ports of Osaka Gas and its Singapore-based subsidiary, Osaka Gas Energy Supply and Trading.

Adnoc’s Ruwais LNG project is scheduled to start commercial operation in 2028. It comprises two liquefaction trains, each with capacity of 4.8 million tonnes per annum (mtpa), which will more than double Adnoc Gas’s existing operated LNG production capacity to around 15 mtpa.

More than 80 percent of the project’s production capacity has been committed to buyers across Asia and Europe through long-term arrangements.

The plant is set to be the first in the Middle East and Africa region to operate on clean power, allowing it to produce low-carbon intensity LNG.

Previously, Adnoc Gas signed 15-year contracts with Malaysia’s Petronas to supply 1 million mtpa of LNG, with Germany’s Energie Baden-Württemberg to supply 0.6 mtpa, and with SEFE Marketing and Trading Singapore, a subsidiary of Germany’s SEFE, to supply 1 mpta.

The company also signed in January a deal to supply LNG to Japan’s Jera Global Markets, from its Das Island facility.

Adnoc Gas announced in November that it expects to acquire Adnoc’s 60 percent stake in the Ruwais LNG project at cost, estimated at around $5 billion in the second half of 2028.

Earlier this month, parent Adnoc raised $2.84 billion from the sale of approximately 3.1 billion Adnoc Gas shares in a secondary offering on the Abu Dhabi stock exchange ADX.

“Adnoc has been a reliable LNG supplier to Japan for nearly half a century,” Osaka Gas executive vice president Keiji Takemori said. “This new contract will help ensure a stable energy supply for our customers.”

Source:https://www.agbi.com/oil-and-gas/2025/02/adnoc-gas-to-supply-lng-to-osaka/

Fitch, one of three influential ratings agencies, has placed Bahrain on a negative outlook amid growing concerns over increasing debt, low levels of foreign currency and high budget deficits.

Debt is projected to rise from 130 percent in 2024 to 136 percent of GDP in 2026 “with a continued upward trajectory over the medium term”, the agency said, while interest payments are expected to account for one-third of revenue in 2025, up from 22 percent in 2019.

The country’s rating remains at B+, which is four steps below investment grade, Fitch said on Monday.

In January public debt increased to almost BHD18 billion ($48 billion), the country’s ministry of finance said last month.

Bahrain, the smallest country in the GCC bloc of six with a population of almost 1.5 million people, has dwindling reserves of oil and gas. It is partially reliant on revenues from the Abu Safah field it shares with Saudi Arabia and requires an oil price of about $125 per barrel to achieve budgetary equilibrium.

Earlier this year, a deal between Aluminium Bahrain (Alba), a major industrial player on the archipelago, and Saudi Arabia’s Ma’aden was abruptly called off “by mutual consent”. Global bank HSBC also announced plans to cease operations in Bahrain last week.

Fitch predicts oil prices of $70 per barrel this year, with a further drop to $65 next year, although production in Bahrain will increase following the completion of large-scale upgrades at the Bapco refinery, which will take output up to 380,000 barrels per day.

Non-oil revenue is forecast to increase to 8.8 percent this year and 9 percent in 2026, fuelled by a 15 percent tax on multinational companies, which was introduced in January and will be collected from the third quarter of the year.

Despite the outlook, Bahrain can still call on the support of its GCC neighbours – in 2018 Bahrain was promised $10 billion in zero-interest loans by Saudi Arabia, the UAE and Kuwait.

“In Fitch’s view, absent strong reforms, Bahrain could require a substantial increase in GCC concessional funding to stabilise and reduce debt,” the report said. “Our base case is that Bahrain would be able to obtain this funding from GCC partners.”

Source:https://www.agbi.com/economy/2025/02/fitch-lowers-bahrain-outlook-on-rising-debt-levels/

This week’s BD 70 million issue of Government Treasury Bills has been oversubscribed by 200%

The bills, carrying a maturity of 91 days, are issued by the Central Bank of Bahrain (CBB), on behalf of the Government of the Kingdom of Bahrain.

The issue date of the bills is January 15, and the maturity date is April 16.

The weighted average rate of interest is 5.56% compared to 5.72% of the previous issue on January 1.

The approximate average price for the issue was 98.615% with the lowest accepted price being 98.615%.

This is issue No.2051 (ISIN BH0008470V73) of Government Treasury Bills. With this, the total outstanding value of Government Treasury Bills is BD 2.110 billion.

Source:https://www.bna.bh/en/CBBTreasuryBillsoversubscribedby200.aspx?cms=q8FmFJgiscL2fwIzON1%2bDmkksYlnnPFthlnZf%2bV%2fSng%3d

Bapco Energies, the integrated company leading the energy transition in the Kingdom of Bahrain, and EOG Resources Inc., a leading U.S.-based hydrocarbon exploration company, have signed a landmark agreement to evaluate a promising gas exploration prospect in the Kingdom.

The signing ceremony builds on the high-level discussions held in early January 2025 where His Highness Shaikh Nasser bin Hamad Al Khalifa, His Majesty’s Representative for Humanitarian Work and Youth Affairs, Chairman of Bapco Energies met with an EOG delegation to explore opportunities in hydrocarbon exploration and innovative energy solutions.

Mark Thomas, Group CEO of Bapco Energies, announced a collaboration with EOG Resources, Inc. on a gas exploration project in Bahrain, with drilling expected to begin in 2025. He noted that this initiative aligns with the Kingdom’s National Energy Strategy, leveraging strategic partnerships and advanced technologies to develop natural resources that contribute to Bahrain’s sustainable economic growth.

The agreement underscores Bapco Energies’ commitment to advancing the Kingdom of Bahrain’s energy transition through innovation and strategic partnerships.

Source:https://www.bna.bh/en/BapcoEnergiesEOGResourcesInc.signstrategicgasexplorationagreement.aspx?cms=q8FmFJgiscL2fwIzON1%2bDlRIRuwLZ7t%2f33GpOz4qRgU%3d

Oil prices held steady on Friday, remaining poised for weekly gains after closing the previous session at their highest in more than two months, underpinned by colder European and U.S. weather.

Brent crude futures were down 9 cents at $75.84 a barrel by 1212 GMT after settling on Thursday at the highest level since Oct. 25. U.S. West Texas Intermediate crude dipped by 6 cents to $73.07, with Thursday’s close its highest since Oct. 14, Reuters reported.

Brent was on track for a 2.2% weekly gain while WTI was set for a 3.5% increase.

Signs of Chinese economic fragility heightened expectations of policy measures to boost growth in the world’s top oil importer.

Source:https://www.bna.bh/en/OilsetforweeklygainsoncolderweatherChinesepolicysupport.aspx?cms=q8FmFJgiscL2fwIzON1%2bDrmfsOgVqOEOSvZ91m67Arg%3d

Manama, Dec. 26 (BNA): Bahrain All Share Index has closed at 1,986.06 points, marking an increase of 0.78 points above the previous closing.

This increase was due to a rise in the financial sector and the real estate sector.

Bahrain Islamic Index closed at 778.48 points, marking an increase of 1.12 points above the previous closing.

Results indicated that 41 equity transactions took place with a volume of 421,022 worth BD 111,618.

Investors traded mainly in the communication service sector, representing 45.15% of the total value of securities traded.

Source:https://www.bna.bh/en/BahrainAllShareIndexIslamicIndexclosehigher.aspx?cms=q8FmFJgiscL2fwIzON1%2bDjQl8Y0lyzJJS1z8ybYQbgE%3d

The Saudi Ports Authority (Mawani) won the Logistics Hub of the Year award at the ShipTek International Conference and Awards 2025 in Dubai, recognising its efforts in enhancing commercial activity and operational efficiency throughout 2024.

Mawani spearheaded major projects in collaboration with leading Saudi and international companies, including agreements to establish eight logistics zones at Jeddah Islamic Port and King Abdulaziz Port in Dammam, with private sector investments totaling SAR2.9 billion.

These developments form part of a broader initiative, bringing total investments in 18 logistics zones across Saudi ports to over SAR10 billion.

A key milestone was Maersk’s largest global logistics investment, inaugurated at Jeddah Islamic Port, covering 225,000 square metres with an investment of SAR1.3 billion.

Mawani further expanded Saudi Arabia’s maritime connectivity, adding 34 new shipping services, linking Saudi ports to eastern and western global trade routes.

This strengthened the Kingdom’s position in international maritime connectivity and facilitated national import and export operations.

Operational performance saw a significant rise in 2024, with total cargo throughput increasing by 14.45%, exported containers rising by 8.86%, and imported containers growing by 13.79%.

ShipTek International is among the leading maritime and logistics awards in the Middle East and Asia, recognising excellence in innovation, sustainability, and logistics development.

Source:https://www.bna.bh/en/SaudiPortsAuthoritywinsLogisticsHuboftheYearawardatShipTek2025.aspx?cms=q8FmFJgiscL2fwIzON1%2bDt140K9Zc5CzonfAqINRX2I%3d