2017

We are already in the second month of the 2017 !! How quick this goes ...

Saudi Arabia economy is still under pressure from different angels. The oil prices is not moving up as expected although the cut of production is already in place. We have a lot of hope that some of the infrastructure and O&G projects should move on. For example there are two mega projects with Saudi Aramco this should improve the situation with contractors as both will be in the range of 7 to 8 B US$. Also some new government policies to be implemented this year and this will help to move on the budgeted projects within the government. Still the movement in the economy is not that positive but it is the right time for companies to plan a head and restructure themselves and clean the shelves from the unproductive boxes. With 10 months left offer to receive 2018, I think the market by that time will be moving toward better situation. Not to forget if the OTC (Oil To Chemicals) goes on and the feasibility studies proved that it is good to go and the technology is accepted, then we are expecting almost 3 million barrels of oil to be used for this program. This is going to be another price support to increase oil prices and therefore market improves too. Also that Saudi Aramco will have to increase their production capacity and maintain the current ones.. The investment should still be high on Oil plants/refineries/explorations and pipelines...

Jeddah metro is been approved lately which will add another 10 to 12 B US$ to the market. Although there are delays but this infrastructure project will be the next on move within KSA.

The fact that two of KSA major infrastructure contractors (bin Laden group and Saudi Oger)  are not given priority to take big jobs is encouraging. The distribution of works will help other organizations to grow or other internationals to come to country.

KSA regulations are under review and hopefully SAGIA will look into more important aspects like utilizing the local workforce with the investing groups within KSA. Adding that as a factor to prequalify contractors. Saudi Aramco has started with IKTVA (In Kingdom Total Value Add) which is great program in my view to increase the local content and to get use of the local (not expensive) talents...

I personally feel that market will be encouraging within the coming year and there will be a boom again reaching 2020.

Best regards,

Saleh