Market Briefing:Market Briefing: Gulf Region Gulf Region
Post Globe 2010Post Globe 2010 March 29, 2010March 29, 2010
Peter Klaassen, P.Eng, MBAGeneral Manager, Canada
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AES - Company ProfileAES - Company Profile
Vision: international environmental strategies & solutions firm est. in
2008
Operations in: Canada
Bahrain
Qatar
Saudi Arabia
UAE
Background
March 20 2005March 20 2005
GCC – Background Information
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The Middle East
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GCC Countries
• Gulf Cooperation Council • Comprised of six discrete Countries
• Kuwait•Saudi Arabia•Bahrain•Qatar•United Arab Emirates•Oman
•Each is unique and has its own system
GCC Countries (more information)
• Rainfall less than 6.5 cm/yr mostly during winter months•Temperatures in summer may exceed 50 degC•Mostly desert, arid land•Majority of population live in Urban Centers•Large Expat Population
Kuwait
Population - 2.6 Million (1.3 Million Expats)17,820 sq km
Mostly Muslim population (70% Sunni, 30% Shia)Parliamentary Emirate – 2/3 elected, 1/3 appointed
Oil Production: 2.44 million bbl/day Oil Reserves: 104 billion barrels - 10% of world
Bahrain
Population - 1.05 Million (.517 Million Expats)266 sq km
Mostly Muslim population (20% Sunni, 80% Shia)Monarchy with appointed Cabinet and withelected parliament
Oil Reserves: 125 million barrels
Saudi Arabia
Population - 28 Million (5.6 Million Expats)2,149,690 sq km sq km
Mostly Muslim populationRoyalty with appointed Council and with elected municipal representatives
Oil Production: 11 million bbl/dayOil Reserves: 264.3 billion bbl - 20% of world
Qatar
Population - 1.45 Million (1.1 Million Expats)11,437 sq km sq km
Mostly Muslim population (90% Sunni, 10% Shia)Emirate with appointed Council and with elected municipal representatives
Gas Production: 580 bcf per yearOil Reserves: 910 trillion cf (3rd in world)
United Arab Emirates
Seven Emirates consisting of : Abu Dhabi, DubaiSharjah, Ajman, Umm al Qaiwain, Ras al-Khaimah,FujairahPopulation - 5.19 Million (4.4 Million Expats)82,880 sq km sq km
Mostly Muslim population (84% Sunni, 16% Shia)Each Emirate is absolute monarchy, with elected President of UAE. Partial Elected Parliament
Oil Production: 2.75 million bbl/dayOil Reserves: 97.6 bbl (10% of world)Gas Reserves: 214 tcf
Oman
Population - 3.3 Million (.58 Million Expats)212,460 sq km sq km
Ibadhi Muslim 75% (other includes Sunni Muslim, Shi'a Muslim, Hindu) Sultanate with appointed Cabinet andUpper Chamber and with elected Lower Chamber
Oil Production: 710,800 million bbl/dayOil Reserves: 18.98 billion bbl
State of the GCC Economy
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Sources World Bank and Desjardin
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Source – World Bank
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Nominal GDP 2005-2006 ($ billion)
0 50 100 150 200 250 300 350 400
Saudi Arabia
UAE
Egypt
Kuwait
Morocco
Qatar
Oman
Iraq
Syria
Lebanon
Bahrain
Jordan
2005 2006 Growth
Middle East GDP ComparisonsMiddle East GDP Comparisons
Saudi Arabia is the Middle East’s biggest free economic market
Canada - $1500 B
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Source of data: Emerging With Confidence: Reassessing the Investment Case for MENASA One Year On. By Abraaj Capital, Sept 2009
Light Crude Oil Trend
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Source - http://futures.tradingcharts.com/chart/co
Estimated that the average cost of finding is $6 and production $5 – total $11 per Barrel
Oil Prices expected to go over $100 per Barrel by mid year
GCC Market Trends
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Rapid population growth (~4% per year)… population to double from 33.5m in 2002 to 67.1m in 2020.
Rapid economic development.
Governments increasing spending on public utility facilities & infrastructure.
All GCC countries in process of privatizing public utility services.
Middle East Economic & Political Risk Ratings (MEDT, 2007)
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GCC Countries
MENA Investment Projection
•Capital Investment over the next 5 years will increase from $392 Bn in 2009 to $618 Bn in 2014, as estimated by Business Monitor International for 11 countries in MENA (*), representing an average 10.2% annual growth.•As a rule of thumb, an appropriate level of capital expenditure is 20% of GDP.
Source – EDC
MENA Investment Projection
Source – EDC
According to the World Bank, middle income countries in MENA will need to invest the equivalent of 9.2% of their yearly GDP ($75-100 billion) over the period of 2008 – 2015 in order to sustain economic growth prospects
– Of that amount, 33% will go towards the maintenance of existing infrastructure
The annual volume of infrastructure projects financed in MENA is estimated to have grown from US$25 billion in 2007 to US$27 billion in 2008, before sharply declining by June 2009 to US$6 billion due the global financial crisis
Not all Good News
• Slowdown in all GCC countries• Collapse of Dubai Real Estate Growth
– Dubaiworld– Naqeel
• Oil Revenues have dropped with decrease in demand, and lower prices
• Political Instability with Iran and Iraq
GCC Environmental MarketGCC Environmental Market
World Bank Estimate
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The World Bank has estimated the needs
of the environmental sector in the Arab
world at US$100 billion over the next 10
years.
Middle East Market Size & Growth Relative to the Canadian Market
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'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Canada
Middle East
Why the Middle East ?
All GCC countries state they are committed to securing a sustainable future and are at different stages of
creating and implementing their environmental legislation,
regulations and standards.
The GCC countries account for 40% of global trade in oil and the region’s strategic importance is set to grow significantly … by 2020 the region will be supplying over half of the
world’s oil needs.
ShukranShukran
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