Highlights
- Egypt has issued a tender to install a second FSRU to satisfy high domestic gas demand
- Iran will find it difficult to meet its ambitious gas production targets despite unveiling several oil and gas projects
- Improved utilisation of LNG plant capacity has helped Qatar reduce maintenance-related production losses
- Algeria will struggle to boost its pipeline gas exports as its domestic demand is outpacing production
Economic overview
Saudi Arabia’s strategy to restructure its state-owned oil firm Saudi Aramco has created uncertainty over the management of the country’s oil and gas sector.
Aramco is expected to be removed from the remit of the country’s Ministry of Petroleum and Mineral Resources, and the royal family may become directly involved in running the company. The move also signals reduced role of veteran oil minister Ali al-Naimi. Naimi is still in his post, but has already been relieved of his duties as the chairman of Aramco’s board.
Quarterly and annual year-on-year GDP growth rates
| Q3 2014 | Q4 2014 | Q1 2015 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|---|
| Qatar | 6.0% | 6.7% | *7.1% | *7.1% | *6.5% | *5.6% |
| Egypt | 6.8% | 4.3% | *4.0% | *4.0% | *4.3% | *4.5% |
| Saudi Arabia | 2.4% | 2.0% | *3.0% | *3.0% | *2.7% | *3.1% |
| Nigeria | 6.2% | 5.9% | *4.8% | *4.8% | *5.0% | *5.3% |
| South Africa | 1.6% | 1.3% | *2.0% | *2.0% | *2.1% | *2.4% |
Meanwhile, King Salman bin Abdulaziz Al Saud has promoted one of his sons – Prince Abdulaziz bin Salman – from assistant oil minister to deputy oil minister. It is widely anticipated that he will replace Naimi. This will go against tradition, whereby the post is held by a non-royal and Aramco is run by technocrats.
Despite Prince Abdulaziz’s involvement in the oil ministry, his experience is limited in comparison with Naimi, which is unsettling the market. The appointment of a royal as oil minister may also cause discontent among Saudi Arabia’s citizens.
Civil unrest in Yemen is increasing amid reports Saudi Arabia may be planning a ground offensive in the country to curb the dominance of the Zaidi Shia Houthi insurgency. Abd-Rabuh Mansour Hadi, Yemen’s exiled president, has asked the UN Security Council to approve such a measure.
Yemen’s LNG exports have already come to a halt as the conflict has intensified, and the Saudi-led Arab coalition has blockaded key ports in the country, disrupting oil exports. The situation is likely to persist in the coming months (see Yemen’s investment landscape worsens, March 2015).
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