Gulf index slides on low oil prices

09 February 2015

Iraq and UAE only countries to record strong growth in projects markets

The Gulf Projects Index dipped by 0.6 per cent as schemes continued to slow down amid lower oil prices. The only markets to record growth were Iraq, Bahrain and the UAE.

Iraq’s projects market increased by 3 per cent due to the announcement of the $11bn Nibras petrochemicals complex. However, the ongoing fighting with the jihadist group Islamic State in Iraq and Syria over oil fields continues to affect hydrocarbons schemes.

The UAE also had a strong week after Spain’s Tecnicas Reunidas was awarded a $700m contract on the Integrated Gas Development expansion in Abu Dhabi. A planned oil storage facility in Fujairah also contributed to the market’s 1.9 per cent rise.

Project updates 
 Project nameProject status
IraqNibras petrochemicals complexStudy
KuwaitSpecial needs school complexOn hold
OmanOmagine projectDesign
Saudi ArabiaRabigh cement plant expansionMain contract bid
UAEBluewaters IslandExecution
For further information visit www.meed.com/meedprojects

Combined with an active real estate market and infrastructure investments, the UAE projects market has surged ahead of Saudi Arabia, showing the biggest year-on-year increase, at 15 per cent.

Saudi Arabia posted a drop of 3.6 per cent, mainly due to budget changes. Aside from a desalination plant in Jeddah, few major schemes have been announced. Authorities are still deciding how to spend an extra $5.3bn of investment that King Salman bin Abdulaziz al-Saud has allocated to the power and water sector.

Upcoming tender deadlines
 ClientContractSubmission date
UAEDubai Electricity & Water AuthoritySolar innovation centre19-Feb
QatarQatar General Electricity & Water Corporation (Kahramaa)Ras Laffan independent water project23-Feb
UAENakheelPalm Gateway01-Mar
OmanPublic Authority for Water & ElectricityWadi Dayqah treatment plant16-Mar
UAEDubai Electricity & Water AuthorityHassyan power plant26-Mar
For further information visit www.meed.com/tenders

Oman saw a 1.4 per cent dip in its projects market as unconventional oil and gas schemes begin to look less feasible. However, the launch of major infrastructure projects mitigated the contraction.

Kuwait recorded a 0.5 per cent fall as public spending dips in response to low oil prices. But with $11.6bn of hydrocarbons schemes planned to come through in the first half of 2015, it is likely to be a busy year in the country.

Qatar’s projects market contracted by 0.3 per cent as it limits fresh investment before the 2022 Fifa World Cup.

In numbers

$11bn Value of Iraq’s Nibras petrochemicals plant

$5.3bn Value of Saudi Arabia’s extra allocation to power and water sector

$700m Value of Tecnicas Reunidas’ Integrated Gas Development contract in Abu Dhabi

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