Aramco signs $6bn deal to help South Korean companies win contracts in the Kingdom 

Export-Import Bank of Korea Chairman Yoon Hee-Sung (L) poses with Saudi Aramco Chief Financial Officer Ziad Al-Murshed (Shutterstock)
Short Url
Updated 07 March 2023
Follow

Aramco signs $6bn deal to help South Korean companies win contracts in the Kingdom 

RIYADH: Saudi Aramco has agreed a $6 billion framework deal with the Export-Import Bank of Korea that could help South Korean companies win contracts in the Kingdom. 

The three-year deal was signed by Eximbank Chairman Yoon Hee-Sung and Saudi Aramco Chief Financial Officer Ziad Al-Murshed in Seoul. 

The agreement states that Eximbank can lend up to $6 billion to Saudi Aramco which can be used to pay South Korean companies involved in projects with the global energy firm. 

"The deal could give a big boost to South Korean companies in winning contracts in the Middle East," an Eximbank spokesperson said. 

The bank also stated that $1 billion out of the $6 billion is set for hydrogen and renewable energy deals. 

The agreement came amid expectations of profitable business opportunities in the Kingdom and the Middle East following the November visit to Seoul by Saudi Crown Prince Mohammed bin Salman. 

South Korean companies are seeking to win construction contracts in Saudi Arabia’s $500 billion giga-project NEOM to develop eco-friendly cities. 

The deal also comes as part of South Korea’s efforts to create a “second Middle East boom”, as referred to by Yoon Hee-Sung, that comes as a follow-up of the first Middle East boom where many Koreans sent home cash by working at construction sites in the region in the 1970s. 

Aramco managed to build a strong relationship with South Korea by dedicating projects in the country and signing agreements with the Asian country’s companies. 

Last month, Aramco signed a memorandum of understanding for cooperation with South Korea’s Hoban Group to work together in construction and manufacturing. 

Moreover, Aramco announced last year a $7 billion project in South Korea to produce petrochemicals from crude oil at S-Oil Corp. 

The project, named Shaheen, is the Saudi company's biggest investment in South Korea and will mark the first commercial use of Aramco and Lummus technology, a leading licensor of proprietary petrochemicals, to produce chemicals from crude. 


Pakistan October CPI up 7.2% y/y, statistics bureau says

Updated 15 sec ago
Follow

Pakistan October CPI up 7.2% y/y, statistics bureau says

  • The reading reinforced a month of easing inflation which hit a historic high of 38% last year
  • The central bank is expected to cut its key interest rate further at its meeting on Monday

KARACHI: Pakistan’s annual consumer price index inflation rate was 7.2% in October, the Pakistan Bureau of Statistics said on Friday, up from 6.9% the preceding month.

The reading reinforced a month of easing inflation — which hit a historic high of 38% last year, and was at 26.8% October 2023 — ahead of a meeting of the country’s central bank next week to review the policy rate, which stands at 17.5%.

A Reuters poll showed the central bank is expected to cut its key interest rate further at the meeting on Monday, with policymakers continuing their efforts to revive a fragile economy as inflation eases.

The October reading was up 1.2% month on month, the statistics bureau said, adding that the fiscal year’s average inflation, from July to October, stands at 8.7%, which is below the 9.5% projected by the International Monetary Fund.
 


Pakistan central bank set to deliver fourth consecutive rate cut to revive economy

Updated 3 min 30 sec ago
Follow

Pakistan central bank set to deliver fourth consecutive rate cut to revive economy

  • All 15 investors and analysts surveyed by Reuters expect the central bank to cut rates next week
  • Policymakers continue efforts to revive a fragile economy as inflation eases off recent record highs

KARACHI: Pakistan’s central bank is expected to cut its key interest rate further at its policy meeting on Monday, with policymakers continuing their efforts to revive a fragile economy as inflation eases off recent record highs.
The central bank, the State Bank of Pakistan, has slashed the benchmark policy rate to 17.5% from an all time-high of 22% in three consecutive policy meetings since June, having last reduced it by 200 basis points in September.
All 15 investors and analysts surveyed by Reuters expect the central bank to cut rates next week. Two expect a 150 bps cut, twelve predict a 200 bps reduction, and one forecasts a 250 bps cut.
Economic activity has stabilized since last summer when the country came close to a default before an eleventh hour bailout by the International Monetary Fund (IMF).
The IMF, which in September gave a boost to Pakistan’s struggling economy by approving a long-awaited $7 billion facility, said that the South Asian nation had taken key steps to restore economic stability with consistent policy implementation under the 2023-24 standby arrangement.
Advertisement · Scroll to continue
While the economy has started to gradually recover, and inflation has moved sharply down from a multi-decade high of nearly 40% in May 2023, analysts say further rate cuts are needed to bolster growth.
Mustafa Pasha, Chief Investment Officer at Lakson Investments, said rates must drop under 15% and hold below that for six months to have a material impact.
The IMF in its latest October report forecast Pakistan’s gross domestic product growth at 3.2% for the fiscal year ending June 2025, up from 2.4% in fiscal 2024.
The government expects annual inflation to have come in at 6-7% last month and slow further to 5.5-6.5% in November.
However, inflation could pick up again in 2025, driven by electricity and gas tariff hikes under the new $7 billion IMF bailout, and the potential impact of taxes on the retail and wholesale sector proposed in the June budget.
Ahmad Mobeen, senior economist at S&P Global Market Intelligence, said that while lower rates will offer some relief to the manufacturing sector, the benefits may be limited due to “elevated input costs, driven by high electricity and gas tariffs, combined with global supply and shipping constraints.”
The survey responses on Monday’s policy rate decision are listed below:


Saudi Arabia’s Wafi Energy becomes majority shareholder in Shell Pakistan

Updated 01 November 2024
Follow

Saudi Arabia’s Wafi Energy becomes majority shareholder in Shell Pakistan

  • Wafi Energy, an affiliate of Asyad Group, holds approximately 87.78% of the total issued share capital of SPL
  • SPL has a network of 600+ sites, countrywide storage facilities and broad portfolio of global lubricant brands

ISLAMABAD: Wafi Energy Holding has become the majority shareholder of Shell Pakistan after Shell Petroleum Co., a subsidiary of global Shell plc, completed the sale of its 77.42 percent interest in SPL, a statement from the group said on Thursday.

Wafi Energy, an established Saudi company and an affiliate of the Asyad Group, now holds approximately 87.78 percent of the total issued share capital of SPL. The Shell brand will remain in Pakistan through retail and brand licensing agreements, with SPL as the exclusive brand licensee.

“Wafi Energy is excited to announce its entry into Pakistan by acquiring majority ownership of Shell Pakistan Limited. This marks a significant milestone in the Asyad Group’s commitment to expanding its presence in Pakistan and the region,” Ghassan Amoudi, CEO of Asyad Holding Group and incoming chairperson of SPL, said.

“As the exclusive Shell Licensee, we are delighted that the Shell brand remains in Pakistan. This continuation builds on a strong legacy, supported by a team of highly skilled professionals who ensure customers have access to Shell’s premium fuel and lubricant offerings, all delivered with the highest safety and security standards.”

Waqar Siddiqui, the CEO and managing director of Shell Pakistan Limited, said the company would continue to build a “sustainable energy future for Pakistan,” combining Wafi Energy’s commitment to growth and investment and Shell’s strong legacy of innovation and trust in the country.

“This new chapter offers Shell Pakistan Limited the opportunity to build upon this strong foundation, ensuring the continued delivery of quality products to their valued customers,” Siddiqui added.

SPL is one of the oldest multinationals in Pakistan with a network of 600+ sites, countrywide storage facilities and a broad portfolio of global lubricant brands. 

Shell has endeavored to support Pakistan’s developmental priorities, from developing and distributing energy by land, air and sea, to providing petroleum products for the construction of mega projects like the Mangla Dam and Kotri Barrage, expanding the country’s growing road infrastructure, to powering the first flights of Pakistan International Airlines, and supporting the next generation of innovative entrepreneurs in Pakistan.


Oil Updates – crude gains more than $1/bbl on reports Iran preparing strike on Israel

Updated 01 November 2024
Follow

Oil Updates – crude gains more than $1/bbl on reports Iran preparing strike on Israel

  • Iran prepares strike on Israel from Iraq — Axios report
  • Focus on US elections, China NPC meeting next week

SINGAPORE: Oil prices extended gains on Friday, climbing more than $1 a barrel to pare weekly losses, as geopolitical tensions in the Middle East rose following reports that Iran was preparing a retaliatory strike on Israel from Iraq in the coming days.

Brent crude futures, which have rolled to the January contract, climbed $1.41, or 2 percent, to $74.22 a barrel by 7:56 a.m. Saudi time.

US West Texas Intermediate crude futures rose $1.46, or 2.1 percent, to $70.72 a barrel after settling up 0.95 percent in the previous session.

Israeli intelligence suggests Iran is preparing to attack Israel from Iraqi territory in the coming days, possibly before the US presidential election on Nov. 5, Axios reported on Thursday, citing two unidentified Israeli sources.

The attack is expected to be carried out from Iraq using a large number of drones and ballistic missiles, the Axios report added.

Oil prices were also supported by expectations that OPEC+ could delay December’s planned increase to oil production by a month or more, four sources close to the matter told Reuters on Wednesday, citing concern about soft oil demand and rising supply. A decision to delay the increase could come as early as next week, two of the sources said.

However, prices are set to fall more than 1 percent for the week, struggling to recover from a 6 percent loss on Monday after Israel’s strike against Iran’s military on Oct. 26 bypassed oil and nuclear facilities and did not disrupt energy supplies.

“Despite the crude oil market looking to lock in a third straight day of gains, it has been unable to completely erase the large gap lower that followed Monday’s re-open,” said IG market analyst Tony Sycamore based in Sydney.

However, WTI’s rebound should extend back toward where it closed last Friday at about $71.80, he added, as tensions in the Middle East returned to focus.

“After that, though, all bets are off. I think it will depend on who wins the US election and what fiscal stimulus details, if any, come from the NPC standing committee meeting,” Sycamore said, referring to major events in the US and China, world’s largest oil consumers, next week.

In China, manufacturing activity swung back to growth in October, a private-sector survey showed on Friday, echoing an official survey on Thursday that showed manufacturing activity expanded in October for the first time in six months. Both surveys suggest stimulus measures are having an effect.

US gasoline stockpiles fell unexpectedly last week to a two-year low on strengthened demand, the Energy Information Administration said on Wednesday, while crude inventories also posted a surprise drawdown as imports slipped.

The world’s largest oil producer pumped a monthly record high of 13.4 million barrels per day in August, EIA said.
 


Pakistani PM pitches energy, infrastructure, technology investments in meeting with Qatari businessmen

Updated 01 November 2024
Follow

Pakistani PM pitches energy, infrastructure, technology investments in meeting with Qatari businessmen

  • Shehbaz Sharif’s visit to Qatar seeks to bolster economic cooperation as Pakistan eyes foreign investment
  • The prime minister highlighted numerous opportunities that make Pakistan an attractive investment destination

ISLAMABAD: Prime Minister Shehbaz Sharif met a delegation of the Qatar Businessmen Association (QBA) and invited them to invest in Pakistan’s energy, infrastructure and technology sectors, Sharif’s office said on Friday, during his visit to the Gulf nation.

Sharif’s visit to Qatar, which began Wednesday, seeks to bolster economic cooperation as Pakistan eyes foreign investment to stabilize its frail $350 billion economy.

The QBA delegation, led by Sheikh Faisal Bin Qassim Al-Thani, comprised leading Qatari business figures, each representing influential sectors within Qatar’s economy.

PM Sharif highlighted numerous opportunities in sectors such as energy, infrastructure and finance that made Pakistan an attractive investment destination, according to his office.

“Delegates expressed interest in Pakistan’s economic landscape and, in particular, in upcoming projects in energy, technology, and infrastructure development,” it said in a statement.

“During the meeting, both sides explored potential collaborations that could drive job creation, innovation, and sustainable development in both countries.”

The meeting brought together key representatives from Pakistan and influential members of Qatar’s business community, emphasizing shared goals for strengthening trade, investment and economic partnerships, according to Sharif’s office.

The QBA members responded positively to the prime minister’s invitation and indicated their interest in expanding their investments into Pakistan.

On Thursday, Sharif separately met with Qatar’s Emir Sheikh Tamim bin Hamad Al-Thani and his counterpart from the oil-rich Arab state, with both sides discussing the importance of strengthening bilateral collaboration in trade, investment, energy and other sectors.

Sharif led delegation-level talks with the Qatari emir before holding a separate meeting with him to discuss a wide array of issues.

“The leaders reviewed the entire spectrum of Pakistan-Qatar relations, exploring potential avenues for enhanced cooperation in trade, potential areas of investment, energy, and culture,” Sharif’s office said.

Sharif’s meetings in Doha are primarily focused on trade and investment and regional discussions, according to the Pakistani foreign office.

Before arriving in Doha, Sharif attended the Future Investment Initiative in Riyadh, Saudi Arabia, where he discussed trade and investment with Saudi Crown Prince Mohammed bin Salman.

The talks built on recent agreements worth $2.8 billion, including investments in agriculture, semiconductor manufacturing, and energy, aimed at strengthening Pakistan’s economy and deepening ties between the two nations.