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From Lagos to Riyadh: The Rise of a New Afro-Arab Creative Powerhouse

19 October 2026 Comments (0) Business, Featured

Africa has the stories. The Gulf has growing ambitions to finance and distribute them. From Nigeria’s prolific film industry to Saudi Arabia’s expanding cinema ecosystem, a new network of cultural and commercial partnerships is taking shape. Film festivals, investment funds and streaming platforms are bringing African filmmakers closer to Arab audiences, opening opportunities for an industry long constrained by limited financing and fragmented distribution.

The numbers illustrate the potential. According to UNESCO’s 2021 report on the African film industry, Nollywood produces approximately 2,500 films annually, making Nigeria one of the world’s most prolific film-producing countries. Across Africa, the film and audiovisual sector generates an estimated $5 billion in annual revenue, according to figures cited by UNESCO, despite persistent challenges involving piracy, infrastructure and access to capital.

Meanwhile, Gulf countries are investing heavily in entertainment as part of broader economic diversification strategies. Saudi Arabia reopened commercial cinemas in 2018 after a decades-long prohibition, while its Red Sea International Film Festival, established in Jeddah in 2021, has developed into a meeting point for filmmakers, producers and investors from the Arab world, Africa and beyond.

The relationship is increasingly moving beyond film screenings and distribution agreements. Financing initiatives, production grants and international project markets are creating opportunities for African filmmakers to develop projects with partners in the Gulf.

Capital meets creativity: the Gulf’s growing interest in African cinema

Saudi Arabia’s entertainment ambitions are closely tied to Vision 2030, the kingdom’s economic diversification programme. Beyond expanding domestic cinema infrastructure, the country is positioning itself as a financing and networking hub for international film production.

The Red Sea Film Foundation provides one of the clearest examples of this strategy. Through its Red Sea Fund, the organisation supports film projects at different stages of development, production and post-production, including works by African and Arab filmmakers.

By 2025, the foundation reported supporting more than 340 projects from over 66 countries across the Arab world, Africa and Asia. Its activities extend beyond grants to include training programmes, industry networking and the Red Sea Souk, a project market designed to facilitate international partnerships.

The results are increasingly visible at major film festivals. In February 2025, nine projects supported by the foundation were presented at the Berlin International Film Festival or its associated industry market. They included The Heart Is a Muscle, a South African drama directed by Imran Hamdulay, and Ancestral Visions of the Future, a documentary by Lesotho-born filmmaker Lemohang Jeremiah Mosese.

These examples demonstrate how Gulf-based institutions are helping African productions gain access to financing and international visibility. However, financial support does not automatically constitute a formal coproduction: the distinction depends on the contractual and production arrangements of each project.

Some projects already illustrate deeper cross-regional involvement. The Mother of All Lies, directed by Morocco’s Asmae El Moudir, lists Morocco, Egypt, Saudi Arabia and Qatar among its production countries. Tunisian filmmaker Kaouther Ben Hania’s Four Daughters similarly brought together production partners from Tunisia, Saudi Arabia and Europe.

Such collaborations provide a more concrete picture of the emerging Afro-Arab audiovisual ecosystem than investment announcements alone.

Beyond cinema: streaming, music and new audiences

Digital distribution is another important factor in the relationship between African and Arab creative industries.

Streaming platforms have reduced some of the geographical barriers that previously limited the circulation of films, television series and music. Services such as Shahid, operated by MBC Group, have helped expand digital entertainment distribution across the Middle East and North Africa, while international platforms have made African productions accessible to wider audiences.

However, reaching viewers across both regions remains a commercial challenge. Language, licensing arrangements, subscription affordability and audience preferences all influence whether a production can succeed beyond its domestic market.

Music offers another avenue for cultural exchange. Nigerian Afrobeats and South African amapiano have gained international recognition, creating opportunities for African artists, promoters and music companies to reach audiences in the Gulf.

Anghami illustrates the development of the region’s digital music infrastructure. Founded in Lebanon in 2012, the streaming company established its headquarters in Abu Dhabi and became publicly traded on Nasdaq in February 2022. Its expansion reflects the growing importance of regional platforms in music licensing, digital distribution and artist promotion.

Yet the commercial relationship between African music industries and Gulf entertainment businesses remains less documented than the global popularity of African genres. Concert appearances and streaming availability demonstrate audience interest, but should not be confused with evidence of large-scale joint investment or production.

Institutional support and the economics of collaboration

The expansion of Africa’s creative economy is also attracting greater attention from development finance institutions.

One of the most significant initiatives is Creative Africa Nexus (CANEX), launched in 2020 by the African Export-Import Bank (Afreximbank). The programme aims to support African creative industries through financing, infrastructure development, capacity building and international market access.

In October 2024, Afreximbank announced plans to increase its CANEX financing facility from $1 billion to $2 billion over the following three years. The initiative covers sectors including film, music, fashion and sports, reflecting growing institutional recognition of creative industries as potential sources of employment, investment and export revenue.

On the Gulf side, the Red Sea Souk has become a platform for connecting filmmakers with potential financiers and production partners. Its 2025 project market selected 40 film and television projects, including 24 projects in development or production, eight works in progress and eight episodic projects.

Together, these initiatives address complementary needs. African producers frequently face financing and distribution constraints, while Gulf-based institutions are seeking to develop international partnerships, strengthen production capabilities and expand their cultural influence.

Egypt and North Africa also occupy an important position in this evolving landscape. Their established film industries, Arabic-language markets and connections with both African and Middle Eastern production networks create opportunities for collaboration. The involvement of Egyptian, Moroccan and Tunisian partners in internationally financed films illustrates how these relationships can operate across several countries rather than through a simple Lagos-to-Riyadh corridor.

A promising market, but significant barriers remain

Despite these developments, Afro-Arab creative partnerships face considerable structural challenges.

Film and television coproductions require agreements covering financing, intellectual property, creative control, revenue sharing and distribution rights. Differences in national regulations, content restrictions and production standards can complicate negotiations, particularly for independent producers without extensive legal or commercial resources.

Language presents another challenge. Nigeria’s film industry produces content in English and several local languages, while much of the Gulf’s mainstream television market is Arabic-speaking. Subtitling, dubbing and culturally adapted marketing therefore remain essential to reaching audiences across both regions.

There is also a difference between supporting African films and building sustainable African production industries. International grants can help individual projects reach completion, but long-term growth requires stronger local financing systems, technical training, production infrastructure and reliable distribution networks.

For Gulf investors, commercial success will depend on identifying projects with viable audiences and distribution strategies rather than assuming that cultural proximity automatically translates into demand.

Nevertheless, the foundations of a broader partnership are becoming more visible. Saudi film funds are supporting African directors, international project markets are bringing producers together, and African financial institutions are expanding their commitments to the creative economy.

The next stage will depend on whether these initiatives produce sustained investment, recurring partnerships and films that succeed commercially across multiple markets.

From Lagos to Jeddah, Cairo and Riyadh, the opportunity is no longer simply to export African stories. It is to build the financing, production and distribution networks that allow African and Arab creative industries to grow together.

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Dream of the Desert: Saudi Arabia’s Bold Bet on Luxury Rail

2 January 2026 Comments (0) Business, Featured

Saudi Arabia is betting on a slower, more exclusive way to travel. With Dream of the Desert, the Kingdom is launching its first luxury tourist train, a project that blends hospitality, mobility and nation branding into a single moving experience. Far from being a nostalgic nod to old-school rail travel, this train is a strategic business tool designed to attract high-value tourism and reinforce Saudi Arabia’s Vision 2030 ambitions.

Developed in partnership with Italian luxury brand Arsenale Group and operated on the Saudi rail network, Dream of the Desert is expected to run across the country’s northern routes, notably between Riyadh, AlUla and Qurayyat. The train will feature around 40 luxury cabins, including suites, lounges and dining cars, accommodating roughly 80 to 90 passengers per journey. This is not mass transport. It is scarcity by design.

A moving luxury asset in the middle of the desert

Dream of the Desert is conceived as a five-star hotel on rails. Interiors are inspired by Saudi architectural heritage, with contemporary design, panoramic windows and bespoke furnishings. Onboard services are expected to include fine dining, curated cultural content and guided off-train excursions, particularly in destinations like AlUla, one of Saudi Arabia’s flagship tourism projects.

From a business standpoint, the numbers are telling. Luxury train journeys elsewhere in the world often sell for between 2,000 and 5,000 dollars per person for multi-day experiences. Saudi Arabia is positioning itself in this premium bracket, targeting international travelers who are willing to pay for exclusivity, storytelling and comfort rather than speed. With limited capacity and high price points, profitability relies on margins, not volume.

The train also capitalizes on existing infrastructure. By upgrading and reimagining rail assets instead of building entirely new ones, the project limits capital expenditure while increasing the value generated per kilometer traveled. It is a classic example of asset optimization, applied to tourism.

Why this train fits Saudi Arabia’s long-term strategy

Dream of the Desert is more than a tourism product. It is a narrative device. For decades, Saudi Arabia has been associated with oil, aviation and road transport. A luxury train crossing the desert sends a different message: one of openness, refinement and experiential travel.

Tourism is expected to contribute 10 percent of Saudi Arabia’s GDP by 2030, up from around 3 percent a decade ago. The country aims to attract 150 million visitors per year by the end of the decade. While Dream of the Desert will only host a fraction of those travelers, its symbolic impact is disproportionate to its size. It helps position Saudi Arabia as a premium destination, not just a new one.

There is also a sustainability angle. Rail travel produces significantly lower CO₂ emissions per passenger than short-haul flights, especially for domestic routes. For a country under increasing pressure to demonstrate environmental responsibility, promoting luxury rail fits the growing global demand for slower, more conscious travel without sacrificing comfort.

The project has not been without controversy. Critics point to the optics of launching a luxury train in a country where questions around human rights, freedom of expression and labor conditions remain central in international debates. Others question the relevance of ultra-premium tourism in a region facing water scarcity and extreme climate constraints, arguing that luxury infrastructure in the desert risks amplifying environmental pressures rather than alleviating them.

There is also skepticism about demand sustainability: with limited global precedent for profitable luxury rail in harsh climates, some analysts wonder whether the project will attract enough repeat international travelers to justify long-term operating costs

In the end, Dream of the Desert is not about getting from point A to point B. It is about redefining what the journey itself is worth. By combining luxury hospitality, cultural storytelling and strategic restraint, Saudi Arabia is testing a simple but powerful idea: in a world obsessed with speed, slowing down can be a premium business.

Photos : cnn.com

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Leyja: The Latest Sustainable Tourism Destination in Saudi Arabia

26 December 2023 Comments (0) Business, Environment, Featured

Leyja, NEOM’s latest sustainable tourism destination in Saudi Arabia, nestled between the Gulf of Aqaba coast and 400-meter-high mountains, exemplifies the kingdom’s commitment to a multifaceted, eco-friendly tourism industry under Vision 2030, offering three architecturally distinct hotels and curated experiences in a nature-reserve setting.

In a significant stride towards a more sustainable and diversified tourism industry, NEOM, Saudi Arabia’s futuristic super-city, has unveiled Leyja, its latest ecotourism destination.

Nestled along the Gulf of Aqaba coast and winding inland through a valley surrounded by 400-meter-high mountains, Leyja is a testament to Saudi Arabia’s commitment to sustainable development and its ambitious Vision 2030 initiative.

Where Is Leyja? 

Leyja is strategically positioned to unfold from the Gulf of Aqaba coast, creating a natural valley that carves through the impressive mountains of NEOM.

What sets Leyja apart is its dedication to preserving nature, with 95% of its expansive landscape designated as a nature reserve.

This aligns with NEOM’s overarching strategy to blend innovative ecological design with construction techniques that integrate seamlessly with the environment.

A Strategic Step in Saudi Arabia’s Commitment

Leyja represents a strategic step in Saudi Arabia’s commitment to diversifying its tourism destinations and boosting its economy. As part of the NEOM super-city, this $500 billion development aims to attract discerning travelers with its ultra-luxurious offerings, including high-end stores, helipads, and fine-dining restaurants helmed by celebrity chefs.

Led by renowned architects Mario Cucinella, Chris van Duijin, and Shaun Killa, Leyja’s architectural direction reflects a harmonious blend of luxury and sustainability. The development features three distinctive hotels, each offering a unique experience while staying true to its natural surroundings.

The “Adventure Hotel” (Chris Van Duijn) is a designed as a vertical structure with a deconstructed aesthetic resembling a cliffside staircase. It’s a hub for tourists seeking high-octane activities such as rock climbing. Its design minimizes impact on the natural terrain, allowing guests to engage with the rugged landscape

 

“Oasis Hotel” (designed by Mario Cucinella Architects) is emerging from the rocks with five facade fins, it serves as a gateway to exploration, offering panoramic views of the valley. The design mirrors the natural context, providing guests with an immersive experience that complements the breathtaking surroundings

The Wellness Hotel is a reflective retreat with two opposing volumes adorned with high-tech facades. This immersive wellness retreat complements Leyja’s commitment to holistic experiences, offering guests a serene escape amidst nature.

Experiences And Activities At Leyja

Leyja goes beyond traditional hospitality by curating refined experiences for visitors. Fine dining by world-renowned chefs, rooftop infinity-style pools, and wellness facilities are just a glimpse of what the destination has to offer.

For those seeking adventure, Leyja provides guided wadi walks, hiking trails, mountain biking, and climbing, allowing guests to immerse themselves in the dramatic mountain landscape.

Leyja stands as a beacon of sustainable luxury in the heart of Saudi Arabia’s mountains, inviting visitors to experience the beauty of nature without compromising on comfort. As the kingdom continues to invest in projects like Leyja, it not only aims to meet its tourism targets but also sets an example for environmentally conscious and innovative development on a global scale. With Leyja, NEOM is not just creating a destination; it’s crafting an ecological masterpiece that harmonizes with the natural wonders of Saudi Arabia.

Photos : zawya.com –

 

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Forbes Identifies the Best Businesses in the Arab World

16 September 2020 Comments (0) Business, Middle East

2020 is not looking like a good year for most businesses. Covid-19 is affecting every stock market around the world and profits and forecasts are becoming major victims of the global pandemic. 20202’s Q1 results are what many people are looking at as indicators of how companies could perform once the current crisis is over. Forbes’ recent list of the Top 100 Companies in the Middle East is a good reflection of not only what companies have been doing well (and will do in the future), but is also a good indicator of how the region itself is performing.

Regional Financial Health

Generally speaking, it comes as no surprise that an oil-rich region does well financially. But in recent years, the oil-producing nations have sought to diversify interests and investments as they keep one eye on a finite and dwindling resource that has for so long provided a steady revenue stream.

Looking at the Top 100 Companies listed, they have total aggregate assets of $3.5 trillion and a value of around $2.3 trillion in terms of market cap over 2019/2020. The total sales amassed by the businesses was $670 billion which represented $148 billion of net profits.

Who and What?

Saudi Arabia dominates the Top 100, with 33 of the 100 companies listed there. Behind them is the United Arab Emirates (U.A.E.) with 21 companies, and Qatar in third place with 18. So those three countries alone have 72% of the list.

As far as business sectors are concerned, the burgeouning financial sector dominates the list with 46 entries. Far behind them in second place is industrial companies with nine entries, then real estate/construction and telecoms companies with eight each.

Top Spot

Despite the increasing diversification happening across the region, it is an oil giant that holds the No. 1 spot and they would hold that spot in most lists whether regional or global. Saudi Aramco is not only the world’s most profitable company, but also the world’s most valuable listed company. It produced the biggest IPO in history and on it first day of trading in December, its market value soared to $1.9 trillion. $0.7 trillion above Apple’s market value on the same day.

To put Aramco in a global context, they pump more than 10% of the world’s crude oil supplies and produce more than twice the oil of all of Canada. Of course, being (prior to the IPO) a government-owned entity and the only oil producer in Saudi Arabia has given it a unique advantage.

Aramco covers several areas of the energy sector, including exploration, transportation, and sales of not only crude oil but also natural gas and chemicals. While other companies may focus on diversification, Aramco focuses on innovation. In 2017 alone, they were granted 230 patents by the U.S. Patent and Trademark Office.

As far as the Top 100 List is concerned, Aramco accounted for 59.6% of the net profits, 11.4% of assets, 69.6% of market cap, and 49% of aggregate sales.

The Other Contenders

While dominating the list, Aramco is surprisingly the only energy company in the Top 10. The other nine companies represent banking and financial, with six out of the ten positions, two telecommunications companies, and one industrial company. The gap between first and second is telling, however. Aramco had profits of $88.2 billion, while the second-placed company – QNB of Qatar – had profits of only $4 billion.

However long the Covid-19 situation lasts, some business sectors may take considerable time to completely recover. But there will be a constant need for most of the sectors covered in the Top 100 list. While oil prices may fluctuate, the sheer size and diversity of a company like Aramco will ensure that they will not suffer too much. And for businesses such as financial and telecoms, the need for their services may grow if anything. One thing is for sure; the Middle East continues to see many companies continue to thrive and grow at both regional and global levels.

Photos :

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OPEC March oil output sinks to 11-month low – Reuters survey

4 April 2018 Comments (0) Actualites, Middle East, Oil

LONDON (Reuters) – OPEC oil output fell in March to an 11-month low due to declining Angolan exports, Libyan outages and a further slide in Venezuelan output, a Reuters survey found, sending compliance with a supply-cutting deal to another record.

The Organization of the Petroleum Exporting Countries pumped 32.19 million barrels per day last month, the survey found, down 90,000 bpd from February. The March total is the lowest since April 2017, according to Reuters surveys.

OPEC is reducing output by about 1.2 million bpd as part of a deal with Russia and other non-OPEC producers to get rid of excess supply. The pact started in January 2017 and runs until the end of 2018.

Adherence by producers in the deal rose to 159 percent of agreed cuts from 154 percent in February, the survey found. There was no sign that other producers had boosted output to cash in on higher prices or to compensate for the Venezuelan decline.

Oil has topped $71 a barrel this year for the first time since 2014, and was trading above $67 on Wednesday. Still, OPEC says supply restraints should be maintained to ensure the end of a glut that had built up since 2014.

In March, the biggest decrease in supply came from Angola, which exported 48 cargoes, two fewer than in the same month of 2017. Natural declines at some fields are weighing on output.

Production in Libya, which remains unstable due to unrest, slipped because of stoppages at two fields, El Feel and El Sharara, setting back 2018’s partial recovery in output.

And production fell further in Venezuela, where the oil industry is starved of funds because of an economic crisis. Output dropped to 1.56 million bpd in March, the survey found, a new long-term low.

Output in OPEC’s largest producer, Saudi Arabia, dropped by 40,000 bpd from February’s revised level, even further below the kingdom’s target.

OPEC’s No. 2 producer, Iraq, pumped more. Exports from the south, the outlet for most of the country’s crude, rose despite maintenance at a loading terminal. Exports declined from the north but domestic crude use increased.

Among others with higher output, the biggest rise came from the United Arab Emirates, where production had dropped in February due to maintenance. Even so, the UAE is still pumping below its OPEC target and showing higher compliance than in 2017.

Output climbed in Qatar, after a dip in February that sources attributed to maintenance. Nigeria also pumped at a higher level, extending a run of more stable supply from Africa’s top exporter.

Nigeria and Libya were originally exempt from cutting supply because their output had been curbed by conflict and unrest. For 2018, both told OPEC that output would not exceed 2017 levels.

OPEC has an implied production target for 2018 of 32.73 million bpd, based on cutbacks detailed in late 2016 and taking into account changes of membership since, plus Nigeria and Libya’s expectations of 2018 output.

According to the survey, OPEC pumped about 540,000 bpd below this implied target in March, not least because of the involuntary decline in Venezuela.

The Reuters survey is based on shipping data provided by external sources, Thomson Reuters flows data and information provided by sources at oil companies, OPEC and consulting firms.

 

(By Alex Lawler; Additional reporting by Rania El Gamal in Dubai; Editing by Dale Hudson)

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Djibouti accuses Eritrea of occupying disputed territory after Qatar withdrew peacekeepers

16 June 2017 Comments (0) Latest Updates from Reuters

By Aaron Maasho

ADDIS ABABA (Reuters) – Djibouti accused neighbouring Eritrea on Friday of occupying disputed territory along their border after Qatar withdrew its peacekeepers.

Foreign Minister Mahamoud Ali Youssouf said Djibouti’s military were “on alert” and that it has lodged complaints to the U.N. and the African Union.

Qatar announced that it was pulling its contingent out on June 14, days after the two East African countries sided with Saudi Arabia and its allies in their standoff with Qatar.

Doha’s foreign ministry did not give a reason for the move but it comes as Doha faces a diplomatic crisis with some of its Arab neighbours. They cut ties a week ago, accusing Qatar of backing Islamist militants and Iran, something Doha strongly denies.

“Qatari peacekeepers withdrew on June 12 and 13. On the same day, there were Eritrean military movements on the mountain,” Ali Youssouf told Reuters.

“They are now in full control of Dumeira Mountain and Dumeira Island. This is in breach of the UN Security Council resolution,” he added, referring to areas that the neighbours dispute.

Authorities in Asmara were not immediately available for comment.

Djibouti, a close Western ally, hosts French and U.S. military bases and is the main route to the sea for Eritrea’s arch foe and Washington’s top regional ally, Ethiopia.

Eritrea has fractious ties with the West, which had previously accused it of backing Somali and other regional insurgents. Asmara denies the charges.

Clashes broke out between the Horn of Africa countries in June, 2008, after Djibouti accused Asmara of moving troops across the border, raising fears the spat could engulf the entire region.

The dispute triggered several days of fighting that killed a dozen Djiboutian troops and wounded dozens. Eritrea had initially denied making any incursions, accusing Djibouti of launching unprovoked attacks.

The U.N. Security Council then requested both sides withdraw from the area, before the neighbours accepted a Qatari request to mediate and deploy peacekeepers.

 

 

 

 

(Writing by Aaron Maasho; Editing by)

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The end of OPEC?

26 June 2016 Comments (0) Africa, Business, Featured

opec meeting

OPEC’s refusal to impose production limits and an evolving global marketplace signal diminished clout for the oil cartel.

When OPEC ministers once again failed to agree on production limits to bolster oil prices in early June, it was yet another signal that the days of the oil cartel’s dominance in the global marketplace are over.

Members of the Organization of Petroleum Exporting Countries may continue to be important players in world oil markets, but “the cartel has lost its privileged ability to control global oil prices,” according to Global Risk Insights, which assesses political and business risk around the world.

OPEC nations, led by Saudi Arabia, traditionally have been the world’s swing oil producers, with enough reserves and daily production to control the price of oil. But that has changed in recent years as the United States, Russia and other smaller non-OPEC countries increased production.

Non-OPEC production rises

Total OPEC production is nearly 37 million barrels a day compared to non-OPEC production of nearly 57 million barrels daily, according to Global Risk Insights.

Despite waning influence, OPEC’s refusal to set production limits has played a major role in creating an oil glut, precipitating a two-year crisis that has seen the price of oil drop to as low as $26 per barrel earlier this year before climbing to $52 this month. That compares to prices of about $110 per barrel in 2014, when the crisis began.

Some OPEC nations, led by Saudi Arabia, have been willing to absorb the financial shocks of plummeting oil prices in order to preserve market share, reasoning that the low prices would drive competitors, notably U.S. shale oil producers, out of business.

OPEC has rebuffed calls to limit production by members Algeria and Venezuela, which have been hard hit by the slump.

Saudis take a financial hit

Saudi Arabia itself has not been immune to the financial impact of low oil prices.

The Gulf nation has spent more than $150 billion of its reserves in less than two years and posted a deficit of $98 billion last year.

Earlier this year, the Saudis borrowed $10 billion from a consortium of international banks, its first foreign debt in 25 years. The government also was considering asking creditors to take IOUs because it cannot pay its bills.

Oil rig at Bakken Formation

Oil rig at Bakken Formation

The OPEC strategy to let oil prices fall in order to wound its competitors has had mixed results, especially in the United States.

While 59 shale oil companies in the U.S. have filed for bankruptcy, production has dropped only slightly because of more efficient production. While financially troubled, the U.S. shale production should be able to rebound quickly once oil prices start rising, perhaps as early as next year.

Deal with Russia falls through

OPEC also came under fire from a top Russian oil executive in the spring, after a proposed deal between OPEC and Russia to freeze output fell through.

Igor Sechin, an ally of President Vladimir Putin, said tensions between Saudi Arabia and fellow OPEC member Iran have undermined the oil cartel. Saudi Arabia and Iran are vying for political dominance in the Middle East, and Iran, freed from Western economic sanctions, has vowed to significantly increase its oil exports.

“At the moment a number of objective factors exclude the possibility for any cartels to dictate their will to the market,’’ Sechin said. “As for OPEC, it has practically stopped existing as a united organization.”

Saudis pledge economic reform

Meanwhile, the Saudis have pledged sweeping economic reforms that signal their intention to go their own way on oil prices.

The reforms aim to diversify the country’s oil-dependent economy by increasing non-oil revenue to $141 billion by 2020. However, Saudi Arabia said it would maintain its output of 12.5 million barrels per day until 2020.

Deputy Crown Prince Mohammed bin Salman said his hope was that in 20 years the country would no longer be oil-dependent. The Saudi kingdom relies on oil for 80% of its revenue.

Saudi Arabia has vast oil reserves and has modernized production at a time when other oil producers including Venezuela and Iran have let their industries deteriorate.

At the OPEC meeting in early June, the Saudi oil minister also alluded to the waning clout of the cartel, saying that the market would determine prices.

“I think managing in the traditional way that we tried in the past may never come again,” Khalid al-Falih. Oil producers should “let the market forces continue to seek and find that equilibrium price between supply and demand.”

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OPEC fails to agree policy but Saudis pledge no shocks

2 June 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

VIENNA (Reuters) – Saudi Arabia promised on Thursday not to flood the oil market with extra barrels even as OPEC failed to agree on output policy, with Iran insisting on the right to raise production steeply.

Tensions between the Sunni-led kingdom and the Shi’ite Islamic Republic have been the highlights of several previous OPEC meetings, including in December 2015 when the group failed to agree on a formal output target for the first time in years.

Tensions were less acute on Thursday as Saudi Arabia’s new energy minister, Khalid al-Falih, showed Riyadh wanted to be more conciliatory and OPEC decided unanimously to appoint Nigeria’s Mohammed Barkindo as the group’s new secretary-general.

Several OPEC sources said Saudi Arabia and its Gulf allies had tried to propose a new collective ceiling in an attempt to repair OPEC’s waning importance and end a market-share battle that has sapped prices and cut investment.

But OPEC sources said the organisation had failed to agree on output policy and set a new ceiling.

Despite the setback, Saudi Arabia moved to soothe market fears that failure to reach any deal would prompt OPEC’s largest producer, already pumping near record highs, to raise production further to punish rivals and gain additional market share.

“We will be very gentle in our approach and make sure we don’t shock the market in any way,” Falih told reporters.

“There is no reason to expect that Saudi Arabia is going to go on a flooding campaign,” Falih said when asked whether Saudi Arabia could add more barrels to the market.

The market has grown increasingly used to OPEC clashes over the past two years as political foes Riyadh and Tehran fight proxy wars in Syria and Yemen.

Saudi Arabia effectively scuppered plans for a global production freeze – aimed at stabilising oil markets – in April. It said then that it would join the deal, which would also have involved non-OPEC Russia, only if Iran agreed to freeze output.

Tehran has been the main stumbling block for the Organization of the Petroleum Exporting Countries to agree on output policy over the past year as the country boosted supplies despite calls from other members for a production freeze.

Tehran argues it should be allowed to raise production to levels seen before the imposition of now-ended Western sanctions over Iran’s nuclear programme.

Iranian Oil Minister Bijan Zanganeh said Tehran would not support any new collective output ceiling and wanted the debate to focus on individual country production quotas.

“Without country quotas, OPEC cannot control anything,” Zanganeh told reporters. He insisted Tehran deserved a quota – based on historic output levels – of 14.5 percent of OPEC’s overall production.

OPEC is pumping 32.5 million barrels per day (bpd), which would give Iran a quota of 4.7 million bpd – well above its current output of 3.8 million, according to Tehran’s estimates, and 3.5 million, based on market estimates.

 

POLITICAL TENSIONS

That “OPEC could not agree on a relatively benign deal which would have been constructive for price is a sign that political differences are undermining the organisation”, said Gary Ross, founder of U.S.-based PIRA consultancy.

“It is bearish short-term for oil prices. But what is also important is that Saudis are not planning to flood the market and want higher prices,” he added.

Falih was the first OPEC minister to arrive in Vienna this week, signalling he takes the organisation seriously despite fears among fellow members that Riyadh is no longer keen to have OPEC set output.

“There could be shorter-term situations in which, in our view, OPEC might intervene and yet other situations — such as long-term growth of marginal barrels — in which case it should not,” Falih told Argus Media ahead of the meeting.

At its previous meeting in December 2015, OPEC effectively allowed its 13 members to pump at will.

As a result, prices crashed to $27 per barrel in January, their lowest in over a decade, but have since recovered to around $50 due to global supply outages.

Until December 2015, OPEC had a ceiling of 30 million bpd – in place since December 2011, although it effectively abandoned individual production quotas years ago.

For a Take-a-Look on Reuters stories on OPEC, click on

 

(By Reem Shamseddine, Rania El Gamal and Alex Lawler. Additional reporting by ⁠⁠⁠⁠Shadia Nasralla⁠⁠⁠⁠⁠; Writing by Dmitry Zhdannikov; Editing by Dale Hudson)

 

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South Africa turns on Saudi-built solar to cut coal reliance

14 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa and Saudi Arabian ACWA Power launched a $328 million solar power plant in the Northern Cape province on Monday, as Africa’s most industrialised country rushes to expand its power supply and cut its coal reliance.

The Bokpoort Concentrated Solar Power (CSP) Project, developed by a consortium led by ACWA Power, is set to provide 1,300 megawatts per hour, powering more than 200,000 homes, a statement from media firm OLB said.

Construction of the plant began in 2013, following a successful bid by ACWA Power, as part of South Africa’s plan to expand the use of renewable energy.

“It is aimed at providing energy security and diversified energy. It instils confidence that major green projects are going to be built in South Africa,” said the Department of Trade and Industry’s (DTI) deputy director general Yunus Hoosen.

Chronic energy shortages are pushing the government to seek alternative sources of electricity from state-owned power utility Eskom’s coal-powered stations that take much longer to build.

Eskom, which provides virtually all of South Africa’s power, is facing a funding crunch as it races to bring new power plants online.

With year-round sunshine and thousands of miles of windswept coast in South Africa, investors are warming to the renewable energy potential, with 66 projects completed or underway since the government launched a first bid round four years ago. [L5N0W61SY]

Bokpoort CSP plant is the first in a series of investments that ACWA Power is making in the power sector in South Africa, said the DTI.

The company expects to commence construction on the 100 MW Redstone concentrated solar power project, also in Northern Cape, later this year and is awaiting the outcome of tender submissions for a 300 MW coal-fired plant in Mpumalanga province in eastern South Africa.

 

(Reporting by Nqobile Dludla; Editing by James Macharia and Alexander Smith)

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A commuter rail network for Jeddah

5 February 2016 Comments (1) Business, Featured, Middle East

jeddah metro

Saudi officials hope the network, to begin operation in 2020, will ease congestion in the nation’s second largest city.

An extensive rail network, a critical piece of a plan to reduce severe traffic congestion in Saudi Arabia’s commercial capital, is expected to begin operation in 2020.

The $12 billion Jeddah network will have four lines – a Blue Line with 19 stations, including the airport, a Green Line with 12 stations, a Red Line with 24 stations, and an Orange Line with 30 stations.

In all, the network will comprise about 150 kilometers of track and will include construction of a road-rail suspension bridge over Obhur Creek. The network will connect to the Haramain high-speed rail station for travel outside the city.

Jeddah, a port city on the Red Sea, is Saudi Arabia’s second largest city after the capital, Riyadh. Jeddah also is a gateway to the holy sites of Mecca and Medina.

Traffic congestion plagues city

The train network is the central element of a larger plan by Saudi officials to ease major automobile traffic congestion in the city of 3.4 million people by 2030.

Traffic in the city has been described as “nightmarish,” and commuters are plagued with poor road design, lack of traffic officers, and drivers who do not follow traffic rules.

One goal for the Jeddah transportation plan is to increase from 12 percent to 50 percent the city population living within a 10-minute walk of public transportation.

Osama Abdouh, executive director of the government-backed Jeddah Metro Company, which is managing the project, said the project will “provide the best and most suitable types and choices for public transportation” for Jeddah residents and visitors.

At the same time, it will reduce traffic congestion and pollution in the city, Abdouh said.

Traffic in Jeddah

Traffic in Jeddah

Bus network, tram and ferries also planned

The Jeddah Public Transit Program also envisions a bus network, cycle networks and marine ferries along with a tramway on the Corniche coastal resort area.

The Saudi Council of Ministers approved the $12 billion transportation plan for Jeddah in 2013. Abdouh said the exact cost is to be determined as plans firm up.

Several contractors are already at work developing plans and designs.

The British architecture firm Foster + Partners was awarded a contract to develop the architecture for the master plan. Aeocom Tecnology Corp., based in the United States, is providing support for the planning and design phase, while a French company, Systra, is providing the engineering designs.

Bids to be sought

Later this year, the Jeddah Metro Company will seek bids a variety of contractors to supply trains and equipment, communications, passenger information, fare collection and train control systems, automatic train supervision, an operations center and depot buildings as well as mechanical, electrical, ventilation, cooling and plumbing systems.

Abdouh said the project expects to ask for bids for many aspects of the project in the second quarter of 2016, once the designs are completed.

The project is also in the process of acquiring approximately 150 pieces of property needed to develop the network in Jeddah.

The Saudi capital, Riyadh, is also getting a rail system. A six-line network with 178 kilometers of track and 85 stations is expected to be completed in 2018.

The projects are going ahead despite economic struggles in Saudi Arabia. Tumbling global oil prices have forced the Saudi government to dip into reserves.

The 2016 budget cuts government spending by nearly 14 percent from 2015 levels, but the country is still expected to have a budget shortfall of 13 percent of gross domestic product this year.

Meanwhile, development of railways is surging in the Middle East and Northern Africa. One 2014 estimate said rail and metro that were under way or planned in the Middle East totaled more than $200 billion and would cover more than 36,000 kilometers.

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