Iraq war weighs on Gulf index

24 July 2014

Increasing instability causes Iraq projects market to contract by $13bn

The Gulf Projects Index edged lower by 0.09 per cent in the week up to 22 July, as disruptions caused by the war in Iraq weighed on the region’s projects market.

Iraq’s projects market contracted by $13bn, losing 2.7 per cent of its value, as schemes were put on hold or cancelled due to increasing instability as the Islamic State in Iraq and Syria consolidated gains after seizing vast swathes of the country last month.

Among the projects put on hold in Iraq over the week was the $4bn scheme to boost production at the Bai Hassan oil field. The field was seized by Kurdish peshmerga forces, and employees of the state-run North Oil Company were ejected on 11 July. A natural gas condensate pipeline that was due to be built at the Akkas oil field in the Al-Anbar province was also put on hold due to the unrest.

Project updates
 Project nameProject status
IraqAkkas oil field developmentOn hold
IraqBai Hassan oil field developmentOn hold
IraqGerman City in NasiriyahCancelled
Saudi ArabiaMixed-Use development in MedinaMain contract bid
Saudi ArabiaMixed-use development in Medina (Pilgrim City)Main contract bid
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Offsetting the decline in Iraq’s projects market, Qatar, Saudi Arabia and the UAE all recorded gains, expanding by a combined $12.3bn.

Qatar’s projects index saw the biggest growth, with an increase of 1.3 per cent. The gains were driven by the launch of several new schemes including projects connected to Qatar General Electricity & Water Corporation’s (Kahramaa) transmission system expansion programme.

Saudi Arabia’s projects market climbed by 0.5 per cent as a number of new housing schemes were announced. The UAE saw a similar rate of growth, expanding 0.4 per cent.

Upcoming tender deadlines
 ClientContractSubmission date
KuwaitKuwait National Petroleum CompanyPressure systemsAug-14
Saudi ArabiaHealth MinistryKing Faisal Medical CityAug-14
OmanOman Power & Water Procurement CompanyQurrayat water projectSep-14
Saudi ArabiaMecca MunicipalityMecca Metro: phase 1Sep-14
OmanTransport & Communications MinistryBatinah Expressway: package 822-Sep
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Iran’s project market declined for a third week, sinking by 0.3 per cent to $227.2bn. The country’s index has lost $3.2bn since 1 July.

The region’s three smallest markets did not see much in the way of growth over the week. Oman dropped by 1.1 per cent, falling to $144.1bn, while Bahrain remained unchanged and Kuwait saw a rise of 0.3 per cent.

Contract awards

Biggest contract $50m

Awarded to US-based CB&I for the expansion of the Sohar refinery in northern Oman

$50m Value of major contract awards

1 Number of contracts awarded

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