Aramco is quite simply unaffected by the Kingdom’s political and economic shortcomings. The company’s strategic importance insulates it from the power plays that serve to threaten most quasi political bodies, arguing the case that institutional independence can exist in the Saudi setting. Of course, its biggest test may yet come in the form of an emboldened Crown Prince.
It’s not all about Aramco. SABIC lives in the shadow of its energy cousin in Saudi’s corporate landscape, but evidence suggests that it may be of equal strategic value to Riyadh’s power players. As the path towards diversification continues, investors are advised to become familiar with SABIC.
Among the multitude of foreign actors vying for influence in Iraq is Russia. Western influence is on the wane as Moscow ups its efforts to engage the political elite; energy companies with ties to the Kremlin are central to this, spearheading a strategy of ‘commercial diplomacy’.
The titans of Arab oil and gas usually belong to the ruling political families or in parastatal government bodies. Hamid Jafar, together with his three children, hold unique sway in the UAE's energy dealings thanks to high level political contacts in the Emirate of Sharjah - making them a private energy success story.
As China looks West in search of economic partnerships, it finds a Kingdom uniquely positioned to assist its 'One Belt One Road' strategy. While their bilateral ties are rooted in energy dealings, Saudi's maritime capabilities may be set to catapult its fortunes in line with Beijing's grand plans.
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With several of the region’s strategic sectors gearing up to ‘welcome’ private actors into the fold, international investors are bracing for renewed levels of access to old economies. As opportunities begin to present themselves, however, a host of hidden domestic dynamics will become more important than they have ever been.
In what is already a significantly destabilised operating environment, Libya’s oil sector is now beset by power plays. Both the National Oil Company and Presidency Council are vying for control over the future of the oil sector and have corresponding visions to go with it: the question is, which faction will win out and where does the upper hand lie?
With private investments set to provide a U.S. $10 billion injection into Egypt’s economy, the in-roads for foreign investors are now opening up. A timely example is Enppi in the country’s energy sector. However, privatisation is a politicised issue and dealing with public stakeholders will be simply unavoidable. Moreover, the post-IPO dynamics in the energy sector may not unfold as expected.
Russia and the KRG have enthusiastically announced a new deal for oil exploitation and commercialisation. While, officially, the economic benefits of this deal are being highlighted, their political implications are much more important. This deal remains obscure and politically exposed to the Kurdish power struggle.
As GCC countries lock horns over the direction that regional policy should take, a geopolitical realignment could feasibly crystallize in the Persian Gulf in the period ahead. Should Saudi and Emirati divestment across certain sectors occur, Qatar’s elite will invariably turn towards a cadre of new partners to plug the gaps in its economy. Enter Iran.
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As interest gathers in Egypt’s energy sector, ahead of the planned launch of production from its Zohr gas field, important sector dynamics must be considered. Egypt’s political upheavals appear to have left their mark on the Ministry of Petroleum, which is indicative of under-the-surface dealings. Investors should engage but exercise vigilance.
Sitting at the intersection of arguably the world’s busiest sea route, Egypt’s maritime sector is a flow with investment possibilities. However, opportunities must not be considered without first understanding the lay of the land. Given that the maritime sector in particular is notoriously opaque in most EMEA markets, the need to understand its governance model in Egypt is paramount.
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