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Saudi Aramco and Baker Hughes JV to develop non-metallic products

Scion

Oil giant Saudi Aramco and energy services company Baker Hughes have formed a 50/50 joint venture, Novel, to develop a broad range of non-metallic products for multiple applications in the energy sector.

Novel’s new plant is being constructed at Saudi Arabia’s King Salman Energy Park (SPARK), a 50 sq km energy city aimed at making the kingdom a global energy, industrial and technology hub.

The new facility will not only create jobs, it will also help to foster growth of an emerging sector in line with Saudi Arabia’s Vision 2030 to diversify the economy away from oil, the companies said in a statement without disclosing the size of their investment.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/saudi-aramco-and-baker-hughes-jv-to-develop-non-metallic-products/79635575

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Saudi private sector rebounds in November as growth rate hits 2020 high

Scion Industrial Engineering

Business activity in Saudi Arabia grew at the fastest pace since the beginning of the year in November, fuelled by a sharp rise in sales and strengthening sentiment.

Non-oil private sector activity in the kingdom rose to the highest level since January, according to IHS Markit’s Purchasing Managers’ Index. The gauge was well above the 50 mark that separates growth from contraction.

While it is welcome news, there is still catching up to do in order to overcome the coronavirus slowdown, the report said.

Concerns that the virus may flare up again still cloud the outlook. Meanwhile, employment figures returned to growth last month, though “only fractionally overall,” according to the report.

The Saudi PMI “pointed to an economy getting back on its feet in November,” wrote David Owen, economist at IHS Markit. “However, most of the key series remain off their trend level, hinting at a continued gap between the economy’s current conditions and its pre-Covid momentum.”

The Saudi PMI rose to 54.7 from 51 in October, the strongest improvement since January.

An increase in new work and better market conditions were highlighted in the report, while both domestic and foreign sales rose, marking only the second upturn in new export orders since February. Business confidence also rose to its highest mark in 10 months, as companies were encouraged by an easing in lockdown measures and news about effective vaccines. There were more private sector investments along with efforts to raise inventories, the report said, while cautioning that some firms delayed payments to suppliers as cash flow was still weak and there were reports of low raw material supply leading to increased cost pressures.

The rate of input price inflation increased from October and was one of the steepest in the last five years, the report also noted.

Source:https://www.arabianbusiness.com/politics-economics/455404-saudi-private-sector-rebounds-in-november-as-growth-hits-2020-high

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Saudis raise crude price to Asia as coronavirus vaccines buoy oil market

Scion Industrial Engineering

Saudi Arabia raised oil pricing for customers in its main market of Asia after optimism over coronavirus vaccines caused crude prices to rise to an eight-month high last week.

The increase, the biggest in five months, indicates the world’s largest oil exporter is confident global energy demand is strong enough to absorb a small boost in output from OPEC+ members next month and that markets will remain tight even with parts of Europe and the US in lockdown.

The Saudis kept prices low for most of the fourth quarter as virus cases surged, crimping demand for crude.

This time, state producer Saudi Aramco raised pricing for Arab Light crude for Asia by 80 cents a barrel to 30 cents above the benchmark. Aramco had been expected to increase pricing for the grade by 65 cents, according to the median estimate in a Bloomberg survey of seven traders and refiners.

Aramco also increased pricing for light crude grades to the Mediterranean region and kept them unchanged for northwest Europe. It lowered pricing for all grades to the US to the lowest since May. Saudi exports to the US have plummeted this year.

Brent crude edged lower on Monday after rising 2.2 percent last week to $49.25 a barrel, its highest level since early March. It’s still down about 26 percent this year. While Asia is leading the overall global demand recovery, the virus resurgence in Europe and the US continue to threaten the pace of recovery.

The Organisation of Petroleum Exporting Countries and allies including Russia agreed last week to add 500,000 barrels a day to crude markets from January. That was less than the increase of two million barrels a day the group had agreed to in April, when it struck its deal to cut output.

Source:https://www.arabianbusiness.com/commodities/455513-saudis-raise-crude-price-to-asia-as-coronavirus-vaccines-buoy-oil-market

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France’s Idemia buys Saudi bank card services firm amid cashless payments boom

Scion Industrial Engineering

France-based Idemia, a global firm developing augmented identity, has expanded its footprint in the Middle East through the acquisition of Saudi Arabia’s most prominent card personalisation bureau.

Strengthened by PCard’s capabilities, Idemia said it will offer an expanded range of card payment services and solutions to the kingdom’s banking and payment ecosystem.

International Smart Card Factory Company, locally known as PCard, was founded in 2008 and offers services from smart card personalisation, mobile banking, digital wallets, instant card issuance and card inventory tracking and management to nine domestic banks.

In 2016, the Saudi government announced a move towards a cashless economy as part of its Saudi Vision 2030 development goals.

As a result of these efforts, the number of cashless PoS (point-of-sale) transactions in 2019 reached 1.6 billion, a rise of 57 percent on the previous year, while contactless PoS transactions hit 918.5 billion in 2019, an increase of 442 percent in 2018, with bank cards and smart phones representing 57 percent of all PoS transactions.

Recent studies suggest that Saudi Arabia is expected to have over 6.4 million credit cards and 28 million debit cards in circulation by 2023.

“Saudi Arabia has evolved rapidly in the last few years, attracting international players to collaborate with local experts to localise global technology in the Kingdom for their needs. Our acquisition of PCard is highlighting Idemia’s longstanding belief in the economy of Saudi Arabia and the huge potential for growth in electronic payments,” said Julia Schoonenberg, senior vice president, MEA, Financial Institutions, Idemia.

“This acquisition stems from our commitment to improve the lives of hundreds of millions of people by enabling trusted and secure access to financial services for everyone… With a professional management team that has intimate knowledge of the Saudi Arabian market, PCard is the perfect fit for us,” she added.

Idemia employs close to 15,000 employees around the world and serves clients in 180 countries.

Source:https://www.arabianbusiness.com/banking-finance/455549-frances-idemia-buys-saudi-bank-card-services-firm-amid-cashless-payments-boom

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Explosion rocks Singapore-flagged tanker off Saudi port

An explosion rocked a Singapore-flagged oil tanker off the Saudi port city of Jeddah Monday, the vessel’s owner said, in the latest in a series of attacks on energy infrastructure in the kingdom.

No group has so far claimed responsibility for the blast on the tanker BW Rhine, but it comes as Iran-backed Huthi rebels in neighbouring Yemen step up cross-border attacks against Saudi targets in retaliation for a five-year military campaign led by Riyadh.

“BW Rhine has been hit from an external source whilst discharging at Jeddah… causing an explosion and subsequent fire onboard,” its owner, Singapore-based shipping company Hafnia, said in a statement.

“The crew have extinguished the fire with assistance from the shore fire brigade and tug boats, and all 22 seafarers have been accounted for with no injuries,” it added.

Saudi authorities did not immediately confirm the blast off Jeddah, a key Red Sea port and distribution centre for oil giant Saudi Aramco.

Hafnia reported “hull damage” in the blast, which struck just after midnight on Monday, and did not rule out the possibility of an oil spill.

“It is possible that some oil has escaped from the vessel, but this has not been confirmed and instrumentation currently indicates that oil levels on board are at the same level as before the incident,” Hafnia said.

Dryad Global, a London-based maritime intelligence firm, also reported the latest explosion, saying it struck a vessel while “carrying out operations within the main tanker anchorage at the Saudi Aramco Jeddah port”.

But it identified the Dominican-flagged tanker Desert Rose or the Saudi-flagged Al Amal Al Saudi as the possible targets.

Series of attacks

The incident comes after an explosion last month rocked a Greek-operated oil tanker docked at Saudi Arabia’s southern port of Shuqaiq, an attack that a Riyadh-led military coalition blamed on Yemen’s Huthi rebels.

No injuries were reported in that blast on the Maltese-flagged Agrari tanker, according to its Greece-based operator TMS Tankers.

Last month, the Huthi rebels said they struck a plant operated by Saudi Aramco Jeddah with a Quds-2 missile. Aramco said that strike tore a hole in an oil tank, triggering an explosion and fire.

Source:https://www.arabianbusiness.com/culture-society/455859-fuel-tanker-hit-by-explosion-off-saudi-coast-near-jeddah

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Fears allayed over expat exodus from Gulf countries

Expats might not flee the Gulf in the numbers predicted earlier as economies fare better than expected during the pandemic, according to Oxford Economics.

“The impact on jobs of the declines in non-oil gross domestic product has been smaller than anticipated,” Scott Livermore, chief economist for the region, wrote in a report Wednesday. “Travel restrictions and the use of furlough or unpaid leave have weakened the link between expats losing their jobs and returning to their home country.”

According to the report, expats are still expected to leave in significant numbers across the six nations comprising the Gulf Cooperation Council – Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman – which are all heavily dependent on foreign workers in sectors as diverse as construction and finance.

As economies slowed and then contracted during the global health emergency, many expats whose residency visas were linked to jobs that had disappeared were forced to head home.

Fuelling the exodus, Kuwait passed legislation trimming its foreign workforce as it sought to assuage local anger over job losses. As a result, the report said both Kuwait and Oman “may have decisively turned their backs on expats”.

On the flip side of that, the drop in Saudi expat jobs has been lower than estimated, at 3.8 percent, excluding domestic workers. And the report revealed foreigners are likely to return to Bahrain and Saudi, although it will probably take a couple of years for numbers to reach pre-pandemic levels.

The report added that, in the UAE, where there have been significant cuts to the workforce announced across key sectors, the expat population will likely decline in line with previous estimates (around ten percent).

Source:https://www.arabianbusiness.com/politics-economics/455720-fears-allayed-over-expat-exodus-from-gulf-countries

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Winter Has Come On US-Iran Ties

Winter is historically an ominous time for relations between the world’s only remaining super power and the world’s biggest Shia republic. The remaining days of 2020 and the snowy months of early 2021 are turning out to be no different.

The assassination of Iran’s nuclear scientist Mohsen Fakhrizadeh on November 27, ensured that the chill winds blowing between Tehran and Washington will not abate. It has hindered the status quo ante in the Joint Comprehensive Plan of Action (JCPOA), better known as the Iran nuclear deal. Fakhrizadeh’s murder has set back a return by the United States to the nuclear deal even before President-elect Joe Biden has had time to seriously consider it.

The repeated winter chill in Iran-United States relations goes back to November 1952 when Dwight D Eisenhower was elected US President and British Prime Minister Winston Churchill persuaded the incoming US administration to collaborate in overthrowing Iran’s populist, anti-colonial Prime Minister Mohammad Mosaddegh.

That disastrous mistake led to a succession of events which culminated in the triumphant return from exile of Ayatollah Khomeini to Tehran in wintry February 1979 and the establishment of the Islamic Republic shortly thereafter. In the late winter of 1979, US diplomats in Tehran were seized as hostages and in the cold January of 1981, after a US election in which Islamic Iran was a central issue, Ronald Reagan was sworn in as the 40th US President. Iran released the hostages 20 minutes after Reagan’s inauguration.

There are many more winters’ tales about Iran and the US, but unlike William Shakespeare’s romantic comedy, none of them are either comic or romantic.

Tehran will be equally unforgiving with some European countries which joined Trump’s coalition of the willing to act against Iran in the last nearly three years. Greatly complicating any Biden effort to give new life to the nuclear deal will be an unknown in Iranian politics five months after Biden assumes office.

President Hassan Rouhani is term-limited and cannot run for re-election. Many names are speculated in Tehran as his successor, but if a hardliner is elected, the result will throw up more questions than answers about the future of Iran’s nuclear programme. That has the potential to be Biden’s biggest foreign policy challenge in his first year.

The other challenge Biden will face is a new arrangement against Tehran, which has emerged at Iran’s doorstep, even if it may be informal as a coalition for now: Israel, Saudi Arabia, the United Arab Emirates and Bahrain, with the potential of an expanded bloc. In any future US dealings with Iran, this is a formidable group of friends, whom no one in Washington can ignore — neither the White House nor the US Congress.

If the US political map, now split down the middle, throws up a fragile Biden presidency, West Asia may well see the tail wagging the dog.

Source:https://www.moneycontrol.com/news/opinion/foreign-affairs-winter-has-come-on-us-iran-ties-6190431.html

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Mubadala’s Strata, Leonardo extend partnership

Scion Industrial Engineering

Strata Manufacturing, the advanced composite aero-structures manufacturing company wholly owned by Mubadala Investment Company, and Leonardo have extended their 10-year association by signing a memorandum of understanding to collaborate on the development and fabrication of composite aero-structure components for major OEM programmes.

The agreement will see Strata and Leonardo work to expand their presence in the global aero-structures sector by leveraging their collective engineering experience and production capabilities to spearhead new technology development.

The MoU covers the provision of technical support services and knowledge exchange from Leonardo, a global high-technology leader ranking among the world’s top 10 aerospace, defence and security players.

“Strata’s main goal is to ensure that the company delivers high-quality components to the world, reflecting the value of the ‘Made with Pride in UAE’ brand,” said Ismail Ali Abdulla, CEO of Strata.

“The core objective of the MoU is to grow our mutual business in global OEM programmes. This will be achieved by fostering strategic new opportunities to enhance Strata’s technological knowledge and capabilities – both key factors in driving the UAE’s knowledge-based economy and empowering the next generation of Emirati engineering pioneers,” he continued.

“After more than 10 year of Strata’s contribution to the ATR program, Leonardo is committed to its strategic ongoing collaborations with Strata,” said Giancarlo Schisano, Leonardo’s aero-structures division managing director.

“Our engineering capabilities and advanced technology processes will be a key success factor to capture new business opportunities in a win-win cooperation scheme.

Building on the strategic partnership between Leonardo and Mubadala, the Abu Dhabi-based global investor, established in 2009. Supported by the Tawazun Economic Council under the Tawazun Economic programme, both Strata and Leonardo are advancing the commercial aviation industry in the UAE, in line with promoting Abu Dhabi as a global aerospace hub to diversify its economy. Strata is the first composite aero-structures supplier to Leonardo in the Arab world.

In addition to Leonardo, Strata serves other leading aircraft manufacturers, such as Airbus, Boeing and Pilatus. Based at Nibras Al Ain Aerospace Park, Strata supports the development of a leading aerospace hub in Abu Dhabi as part of the emirate’s economic diversification plan.

Source:https://www.manufacturingtrade.com/news-detail:ae6c0f15-5408-cf88-000f-5e11d5cb5b4c.html

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UAE approves policy for advanced industry

It will be built around six guiding principles and raise profile of industrial sector

Abu Dhabi: The UAE Cabinet has approved the policy for advanced industries to spread the “Fourth Industrial Revolution” across sectors. The policy was approved by the Cabinet chaired by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

The policy is based on six main themes – Balanced development in various areas of the country; flexibility in plans and policies; integration between the seven emirates in industrial and logistical capabilities and services; commitment to improving the quality of life; leadership in innovation to raise efficiency and productivity and reduce cost; and increase dependence on industries with skilled labour.

The policy aims to stimulate the business sector to adopt and develop future-oriented industries, and enhance their capability to compete in global markets. There will also be a simultaneous shift towards sustainable industry and creating job opportunities for Emiratis.

The policy focus will be on technological development, digital manufacturing, and developing a knowledge–based economy with high value addition. On the labour front, the policy will integrate more Emiratis into the industrial workforce and reduce the gender gap within it.

The contribution of the industrial sector to GDP reached 8.9 per cent in 2018, while the exports attained by the sector accounted for 20 per cent. In 2017, the sector provided more than 460,000 jobs in the various emirates, making it the third largest in terms of employment.

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Agthia shareholders approve merger plan with dates giant Al Foah

Scion Industrial Engineering

Shareholders of UAE-based food major Agthia Group have approved a proposed merger with Al Foah Company, the world’s largest date processing and packaging company.

The backing was given at Agthia’s 15th general assembly meeting, a statement said.

Agthia said the combined group will have the “scale, ambition, and strong capabilities across the value chain to support its future expansion plans as one of the top ten consumer food and beverage groups in the Middle East”.

Khalifa Sultan Al Suwaidi, chairman, Agthia Group and chief investment officer of parent company ADQ, said: “The shareholders’ approval of the combination with Al Foah supports Agthia’s vision and our plans to expand the offering of premium quality products in our portfolio. We embrace opportunities that allow us to strengthen the food and beverage sector in the UAE and wider region, and also emphasise our commitment to an outstanding customer experience.”

Alan Smith, CEO of Agthia Group, added: “The strategic combinations with Al Foah and Al Faysal are two of our key achievements of the current financial year, reinforcing Agthia’s vital role in the region’s food and beverages sector. Upon completion of the transaction with Al Foah, the group will immediately rise to become a regional champion in the date market with substantial global prospects, diversifying its product portfolio and expanding its international footprint.”

Under the terms of the agreement received on October 6 from General Holding Corporation (Senaat), Senaat will transfer the entire issued share capital of its wholly-owned subsidiary Al Foah to Agthia, in exchange for the issuance of mandatory convertible instruments with a nominal value of AED1 each in an aggregate principal amount of AED450 million. These shall be convertible, immediately following completion of the transaction, into 120,000,000 ordinary shares of par value AED1 each in the capital of Agthia.

The issued share capital of Agthia will increase from AED600 million to AED720 million as a result.

The transaction is expected to be completed by the end of 2020, after which Agthia Group will be 59.17 percent owned by Senaat, part of ADQ.

Source:https://www.arabianbusiness.com/retail/455292-agthia-shareholders-approve-merger-plan-with-dates-giant-al-foah