17' to Comply with Opec Cuts
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YUAN FILLIP | Page 3 POLITICAL HIT | Page 7 China dilutes South Korea dollar role in slashes 2017 forex basket GDP forecast Friday, December 30, 2016 Rabia II 1, 1438 AH GULF UPBEAT : Page 2 Heavy lift ing GULF TIMES by foreign institutions helps QSE BUSINESS cross 10,400 ‘Prolonged low oil prices seen Qatar to trim oil output weighing on government ‘more than 11% in ’17’ to spend in Mideast’ A prolonged period of low oil price has impacted government spending in the Middle East, but the move toward economic diversification and reduced reliance on oil is prompting greater investment in the region’s high-potential sectors including real estate, construction, hospitality, tourism and comply with Opec cuts education, according to Booz Allen Hamilton. “There is also a greater national focus on achieving By Santhosh V Perumal defi cit is forecast to be QR28.3bn in 2017. operational eff iciency across sectors – and one notable Business Reporter The estimated defi cit in the budget was area that stands to benefit immensely from embracing due to a combination of a phase of high ex- digitally-enabled solutions is utilities,” it said in a forecast penditure on development and low energy of energy trends in 2017. atar’s oil output is slated to be lower prices, Global said. The utilities sector has historically under-invested in by more than 11% year-on-year in “The budget demonstrates the govern- information technology (IT), but an increasing number of Q2017, in line with the decision of ment’s commitment to complete all major utilities in the Middle East and North Africa (Mena) region the Organisation of the Petroleum Export- sector projects on schedule,” it said, the key are waking up to the benefits of smart technology. ing Countries (Opec) to cut production, focus for the 2017 budget is to ensure ma- In utilities and electric power, the traditional supply chain is according to an estimate of a leading eco- jor projects (including the ones associated undergoing change driven primarily by regulation, public nomic think-tank in the Gulf Cooperation with the 2022 World Cup) are executed as policy, plentiful inexpensive natural gas, and dramatic cost Council. planned. declines in renewable energy and storage. According to the Global’s calcula- Allocations for major projects were Dr Walid Fayad, executive vice president at Booz Allen tion, Qatar’s oil production is estimated QR93.2bn or 47% of the total expendi- Hamilton (Mena) said, “Energy and technology form the at 0.62mn barrels per day (mbpd) in 2017 ture. In 2017, the government is expected backbone of global economies and play a crucial role against 0.7 mbpd in the previous year, im- to sign contracts for new projects worth in driving the operational success of all other sectors. plying a fall of 11.43%. QR46.1bn, including infrastructure and As innovation and technological disruption become the The lower production is in line with the transportation at QR25bn, projects linked norm across the Mena region, we are increasingly seeing decision of the Opec and non-Opec mem- to World Cup 2022 facilities totalling regulators and policymakers embracing game-changing bers to collectively reduce output by 1.8 QR8.5bn, health and education QR5.8bn, trends in the energy sector – from support of renewable mbpd, eff ective from January 1, 2017, in or- Qatar’s lower production estimates are in line with the decision of the Opec and other sector projects valuing QR6.8bn. energy, advanced metering, and grid modernisation to big der to “rebalance” the over-supplied global and non-Opec members to collectively reduce output by 1.8 mbpd Funds to the education sector remain at data and cloud. We expect that wider adoption of these market. QR20.6bn, representing 10.4% of the ex- technologies will increase overall operational eff iciencies, Qatar’s hydrocarbon bellwether has an- Oil in 2017 seen capped below $60 by strong dollar, US shale penditure. They are allotted to complete especially in the wake of a period of prolonged low oil nounced its production cut plan, in line 28 schools and nurseries and construct 17 prices.” with the Opec’s call. “We have started Oil prices will gradually rise towards $60 in the first, to $56.51 in Q2, $58.69 in Q3 new schools and nurseries. Funds are also Dr Adham Sleiman, vice president, Booz Allen Hamilton advising our customers of the expected per barrel by the end of 2017, a Reuters and $59.78 in the fourth quarter. allocated for new projects in Qatar Univer- (Mena) said, “Data analytics has emerged as one of the reductions in oil deliveries to ensure the poll showed yesterday, with further Brent has averaged about $45 per barrel sity, including laboratories for the Faculty key trends that will shape the future of the energy sector state’s compliance with Opec’s alloca- upside capped by a strong dollar, a likely so far this year. of Sciences and the Faculties of Education, in 2017. Big data is rapidly changing the way the energy tions,” Qatar Petroleum president and recovery in US oil output and possible The poll forecast US light crude will Pharmacology, and Law. The money is also sector operates globally – by reducing costs, optimising chief executive Saad Sherida al-Kaabi said non-compliance by Opec with agreed average $55.18 a barrel in 2017. WTI has kept aside to complete the projects in the investments and reducing overall risk. In order to achieve recently. cuts. averaged about $43.38 so far in 2016. Qatar Foundation for Education, Science these objectives, and create additional value from On Qatar’s 2017 budget, Global said Qa- Brent crude futures will average $56.90 “Crude prices should trade most of and Community Development, including untapped areas, organisations in the Middle East must tar’s expected revenues may be “understat- a barrel in 2017, according to 29 analysts the time above their 2016 average. A infrastructure and transportation, and re- establish holistic digital strategies that include upgrading ed” as the current oil prices remain above and economists polled by Reuters. stronger upside potential should become search facilities in Education City. their required digital capabilities.” $50 a barrel. The current forecast is marginally lower evident especially in the second half In 2017, planned spending to the health- Change continues to be the defining feature of the global “Due to the conservative assumption than the $57.01 forecast in the previous when the market fundamentals will care sector stands at QR24.5bn, repre- energy sector in 2017, the Booz Allen Hamilton report said. that oil prices would remain around $45 survey. record a significant improvement (under senting 12.3% of the expenditure. Several In the oil and gas industry, as well as in electric power, per barrel, revenue expected in 2017 may be However, average Brent prices are the assumption of strong compliance projects, including the fi nal phase of Sidra major internal and external forces are driving change, understated, on our estimates, as current expected to improve with each to the Opec deal),” said Intesa SanPaolo Medical and Research Center, would be fi - requiring industry leaders to revisit strategies. oil prices stand well above $50 per barrel.” subsequent quarter, starting with $53.67 analyst Daniela Corsini. nanced during the year. “In oil & gas, 2016 was a year of continued overproduction. The budget oil price assumption was $48 Allocations have also been made to in- The resulting oil inventory overhang finally had an eff ect in for 2016, $65 (2013-15) and $55 (2012). crease facilities at Hamad General Hospi- reducing US shale production, but did little to spur demand The country’s 2017 revenue is estimated crease of 9%. This is ascribed to a boost in QR198.4bn vis-à-vis QR202.5bn in the tal, and complete the Laborers’ Hospital that’s needed to bring the global market into balance,” it to be QR170.1bn compared to QR156.0bn non-oil revenue, Global said. previous fi scal year, easing slightly by 2%, in the Industrial Area, and expand Hamad added. in the previous fi scal year, implying an in- Expenditure is expected to amount to it said, adding consequently, the budget General Hospital. Emirates receives first Rolls powered A380, resolves Turkish confi dence index issues with engine maker hits record low in December Reuters Dubai Reuters Ankara Emirates, the world’s biggest long-haul airline, has taken urkey’s economic confi dence index delivery of its first Rolls-Royce tumbled more than 18% to a record engine-powered Airbus A380 Tlow in December, data showed yes- superjumbo and has resolved its terday, pointing to an even more pessimis- dispute with the engine maker tic outlook after the economy shrank 1.8% over a technical issue. in the third quarter. The A380 jet arrived in Dubai The index, a broad measure of senti- yesterday morning, two days ment about the economy, dropped to 70.52 after Airbus said it would delay points in the fi nal month of the year from the delivery of 12 A380s to the 86.55 a month earlier, the Turkish Statistics airline over the next two years. Institute said. An Emirates spokeswoman told It was the lowest level since the institute Reuters the Rolls-Royce engine Emirates is the biggest operator of the A380 having ordered 142 of began compiling the data in January 2012. jet had arrived, but declined to the superjumbo jets. The index indicates an optimistic eco- say when it would be deployed nomic outlook when above 100 and a pes- for passenger services. diff erent spokeswoman told the Rolls-Royce engines.