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Middle East contracts at $5.4 billion
According to the Middle East Economic Digest, contracts awarded in the Middle East in the first half of this year reached $5.4 billion. The most prominent projects are Saudi Arabia’s installation of a 1,200mw thermal power plant that is commissioned to Alstom (France) at $3 billion. On the other hand, United Arab Emirates’ (UAE) Shah gas field exploration by Abu Dhabi National Oil Company (Adnoc) and Conoco Phillips is worth $1 billion. Other prominent projects include Tunisia’s 400mw combined cycle power plant that is being built by Alstom for $529 million. Country wise, UAE’s total awarded projects stand at $1.6 billion, Saudi Arabia’s at $3.15 billion and Kuwait’s at $158.5 million.
GE and Mubadala in $8 billion partnership
Mubadala Development Company, an investment company owned by the Abu Dhabi government, announced an $8 billion partnership agreement with GE to establish a commercial financial business. The aim of the agreement is to invest in infrastructure assets, real estate, clean energy research and development and aviation. Both parties will contribute $4 billion each in equity to the joint venture over the next three years and expect to build assets up to $40 billion over the next 12-18 months. It is worth noting that according to Khaldoon Al Mubarak, CEO of Mubadala, the company’s long term plan is to become one of the top ten shareholders in GE through buying shares on the open market. GE is worth about $3.3 billion.
Fitch upgrades Saudi Arabia’s credit rating to AA-
The Middle East and Africa monitor expects Saudi Arabia’s real GDP growth to push higher in 2008 and 2009, to be around 4.0% and 4.3% respectively. This is mainly due to the non-oil sector expansion, increasing oil production and a jump in global oil prices. Moreover, the monitor expects the OPEC basket to average $121.5/bbl in 2008, up 57% from the previous year. This will spill over other areas of the economy, notably the external sector that will lead to a trade surplus of around $328 billion, more than double the $151 billion recorded in 2007. In line with Saudi Arabia’s growing economic strength, on the back of record oil prices and increasing energy production, Fitch Ratings have upgraded the kingdom’s credit rating from A+ to AA-. The agency also changed the kingdom’s long-term ratings outlook from positive to stable. The new ratings put Saudi Arabia on a par with Kuwait, and one notch below Abu Dhabi, and although Saudi Arabia is unlikely to need any additional financing in the short-to-medium term, the upgrade is likely to increase foreign direct investments.
