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For six years, companies in the GCC have endured some of the toughest business conditions ever seen in the region as volatile oil prices forced governments to implement strict fiscal controls to limit deficit and debt growth.
As we head into 2022, the outlook is looking much brighter. The rebound in energy demand saw oil prices surge above $85 a barrel in October, and Brent crude is expected to average about $71.5 a barrel in 2021, its highest since 2014. Forecasts are for even stronger prices in 2022.
With an average fiscal breakeven oil price of $68.5 a barrel in the GCC in 2021 and $62.5 a barrel in 2022, the return of budget surpluses is transformative.
With over $1.7tn-worth of projects in pre-execution across the Mena region, there is a backlog of projects.
There will be a rebound in project spending in 2022 and 2023 – perhaps as much as 20 per cent. Saudi Arabia and Egypt in particular are set for strong growth.
But the end of austerity does not mean the end of the challenges.
MEED's 2021 EPC contractor ranking is also included in our latest issue. In a year of deals dominated by the gas sector, Qatargas’ $13bn liquefied natural gas train contract has proved to be the kingmaker.
Local players, meanwhile, are reaping the dividends of localisation policies as operators push local contractors to the fore.
This month's 17-page Market Focus is packed with exclusive analysis on Bahrain, where Manama’s fiscal tightrope walk leaves little room for error.
Bahrain relaunched its economy for the post-Covid era at the end of October with a revised economic vision and updated fiscal balance plan. Read more here.
Bahrain’s commitment to the energy transition was also underlined in late October when Manama announced that it aims to reach net-zero carbon emissions by 2060.
MEED interviews Abdul Hussain bin Ali Mirza, president of Bahrain’s Sustainable Energy Authority, who is deploying change-management skills to help the country meet its net-zero target.
Must-read sections in the December 2021 edition of MEED Business Review include:
> AGENDA: Region eyes return to boom
> BIG INTERVIEW: Managing changes on Bahrain's road to net-zero
> INDUSTRY REPORT: Gas commands EPC contracting market
> MARKET FOCUS: Bahrain’s future hinges on reform
> TECHNOLOGY: Sky pods maker eyes UAE projects
> GULF PROJECTS INDEX: New projects buoy Gulf index
> OCT 2021 CONTRACTS: Region records significant increase in deals
> BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts
We hope you enjoy the December 2021 edition of MEED Business Review.
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