Abu Dhabi National Oil Company (ADNOC) confirmed on Saturday it has entered into formal negotiations with OMV AG about the potential creation of a new combined petrochemicals holding entity, through the proposed merger of their respective existing shareholdings in Borouge plc and Borealis AG.
“ADNOC is excited to confirm that, following initial exploratory discussions, it has entered into formal negotiations with OMV,” the Company said, describing the opportunity as being full of many positive prospects for both parties.
Borouge is listed on the Abu Dhabi Securities Exchange (“ADX”) with 54 percent owned by ADNOC, 36 percent by Borealis, and 10 percent held by retail and institutional investors. Borealis is owned 75 percent by OMV with ADNOC holding 25 percent.
ADNOC is undertaking these negotiations as majority shareholder of Borouge, and OMV as majority shareholder in Borealis, with any final decision subject to Borouge’s, and other relevant parties’, governance processes.
The potential merger would mark the next transformative milestone in ADNOC’s ongoing value creation and chemicals growth strategy, with any transaction subject to customary regulatory clearances.
The Abu Dhabi-listed Borouge is itself a partnership between ADNOC and Borealis and has a market value of about $22 billion.
The two parties are discussing a possible valuation of about $10 billion for Borealis, including its Borouge stake, Bloomberg said earlier this month.
Sources said that negotiations have been on and off for several months and could still be delayed or stopped, with specific value and ownership structure being the two fundamental obstacles to reaching any agreement.
The Gulf Cooperation Council and Japan announced on Sunday the resumption of Free Trade Agreement negotiations, by signing a joint statement on the sidelines of a meeting held by Japanese Prime Minister Fumio Kishida and the Secretary General of the GCC, Jassem Mohamed Albudaiwi, in Jeddah.
Albudaiwi said the announcement comes in implementation of the directives of the Ministerial Council to ink free trade agreements with the trade partners of the GCC countries as part of the priorities that were agreed to accomplish at its session which took place in June 2022.
He added that Japan is considered as one of the priorities of the Council Cooperation with which it seeks to bolster strategic, economic, development and investment relations.
He expressed the hope of GCC member states to consolidate trade and investment ties between the two sides through this agreement, highlighting its role in launching a new era of partnership that is aimed at providing many opportunities for joint growth for the business communities of both sides, especially in priority sectors.
Moreover, Albudaiwi pointed out that the agreement will pave the way for the development of a comprehensive economic framework based on mutual interests, which, in return, would establish stronger strategic cooperation, promote innovation, stimulate economic growth, and create job opportunities for both sides.
He emphasized the strategic and important bonds between the GCC countries and Japan in all areas, most notably the high level of political coordination, as well as cooperation in the field of energy and trade exchange, indicating that Japan ranked fourth in terms of exports from Gulf countries with a value of $76.7 billion and ranked fourth in terms of imports from the GCC, which are valued at $22 billion.
Saudi Arabia’s annual inflation rate eased to 2.7% in June from 2.8% the previous month, government data showed on Sunday.
Prices for housing, water, electricity, gas and other fuels rose by 9.1% overall in June compared with the same month last year, while restaurant and hotel prices were up by 4.3% and education up by 3%, the Kingdom’s General Authority for Statistics data said.
On the other hand, prices for clothing and shoes fell 2.9%, communication costs were down by 0.7%, and miscellaneous personal goods and services by 0.1%.
Inflation in Saudi Arabia has been on a downward trend since starting the year at a rate of 3.4% in January.
Türkiye raised tax on petrol on Sunday to help to fund a 1.12 trillion lira ($42.2 billion) increase to its 2023 budget after February’s earthquakes and the May presidential election sent spending soaring.
The additional fuel tax will help with a budget deficit that jumped to 263.6 billion lira in the first five months of the year, up from 124.6 billion lira a year earlier, but it could also stoke inflation that had declined to 38.21% in June from a 24-year high of 85.51% last October.
The wider deficit was largely because of increased spending ahead of May elections, when President Tayyip Erdogan was elected for a third term, as well as on rebuilding work after the earthquakes in southern Türkiye.
The earthquakes, which killed more than 50,000 people, are expected to cost Türkiye more than $100 billion in total.
In the latest step to strengthen the Treasury’s cash reserves, the tax rate for gasoline was increased to 7.52 lira per litre from 2.52 lira ($0.1) while tax on diesel oil rose to 7.05 lira from 2.05 lira.
The impact of the tax adjustments, coupled with value-added tax (VAT), is expected to add about 6 liras to the final pump price, up more than 20% a litre, Reuters calculations show.
The 1.12 trillion lira boost to Ankara’s budget was approved by parliament on Saturday and follows various other recent tax increases among efforts to bolster government coffers, including a two percentage point increase to VAT.
The lira has lost more than 80% of its value since 2018 and has shed more than 28% in 2023, pushing up prices of a broad range of goods from fuel to food in the import-dependent country.
Energy giant Shell will supply Morocco with six billion cubic meters of liquefied natural gas (LNG) over 12 years under a new agreement, Morocco’s energy ministry has said.
Representatives of Morocco’s national electricity authority, ONEE, and the British firm signed a contract on Friday in Rabat, the ministry said in a statement.
According to AFP, the agreement includes the annual delivery of 500 million cubic meters of LNG to Morocco. The value of the 12-year deal has not been disclosed.
In the initial years, the gas will be delivered through Spanish ports and the Maghreb-Europe Gas Pipeline (GME). It will eventually be delivered through planned Moroccan LNG terminals.
According to ONEE chief Abderrahim El Hafidi, the agreement with Shell will “address part of our needs and ensure the supply of natural gas to our power plants”.
Leila Benali, Morocco’s minister of energy transition and sustainable development, was quoted in the statement as saying “this medium-term supply contract will strengthen the kingdom’s energy security and improve its competitiveness by accelerating the Moroccan decarbonisation strategy.”
Riyadh and Tokyo will sign agreements and memorandums of understanding in several sectors of mutual interest on the sidelines of Japanese Prime Minister Fumio Kishida’s visit to Saudi Arabia on Sunday, the Saudi Ministry of Investment announced in a statement.
The Ministry also said it will host the Saudi-Japanese round table meeting in Jeddah to strengthen the economic and investment ties between Saudi Arabia and Japan.
The round table aims to explore potential investment opportunities across sectors such as petrochemicals, healthcare, mining, financial services, and logistics.
During the meeting, there will be discussions on significant projects in both countries, as well as the signing of agreements and memorandums of understanding in several sectors of mutual interest, the Ministry said.
It added that the private sector institutions from both sides will have dedicated sessions to review areas of cooperation, investment partnerships, and exchange of expertise.
Japan and Saudi Arabia are expected to agree on joint investment to develop rare earth resources during Prime Minister Fumio Kishida’s visit to the Middle East starting Sunday, Nikkei reported.
Kishida plans to visit Saudi Arabia and United Arab Emirates, and Qatar on July 16-18.
Rare earth resources are essential for decarbonisation and production of electric vehicles in particular as Japan aims to be carbon-neutral by 2050.
According to Nikkei on Saturday, Japan and Saudi Arabia will agree on rare earth resources cooperation on Sunday to jointly explore development projects in other countries.
Japan is planning to resume negotiations with the six Gulf Cooperation Council countries next year, Japanese Yomiuri Shimbun reported.
Prime Minister Fumio Kishida is expected to reach an agreement Sunday with GCC Secretary General Jasem Al-Budaiwi as part of his visit to Saudi Arabia, the report cited sources as saying.
By resuming negotiations and deepening trade relations with the Gulf states, Japan hopes to strengthen its energy security, after talks were suspended in 2009.
Most recently, in May, Japan imported around 76 million barrels of crude oil, of which 97 percent (73.68 million barrels) came from GCC countries.
In 2020, Japan imported goods, primarily crude oil, worth about ¥5.4 trillion from GCC countries, while exporting cars and machinery parts worth about ¥2.1 trillion to those countries.
Japan does not impose tariffs on goods imported from the GCC, but GCC countries impose a 5% tariff on most products imported from Japan.
Consequently, Japan Business Federation and other organizations have urged the government to resume FTA negotiations with the GCC in hopes an agreement will result in the elimination or reduction of tariffs.
Due to the high income level in the Gulf Cooperation Council countries, some within the Japanese government expect the FTA to lead to an increase in exports of manufactured goods, in addition to agricultural, forestry and fishery products.f
Following Russia’s invasion of Ukraine, there have been noticeable moves within the international community to strengthen trade ties with Middle Eastern countries with an eye on stabilizing energy supplies.
China and South Korea have already resumed FTA negotiations with the GCC, putting Japan under pressure to accelerate negotiations.
Egypt’s Finance Ministry stated in a press release on Friday that the preliminary final account of the budget for the fiscal year 2022-2023 shows a total deficit of 6.2% of the gross domestic product (GDP), slightly higher than the previous fiscal year’s 6.1%.
According to the statement, published by the Egyptian Cabinet on its Facebook page, the budget achieved an initial surplus of 1.7% of the GDP, despite an increase in expenses to 2.13 trillion Egyptian pounds ($69 billion), with a growth rate of 16.3%.
The initial surplus excludes debt interest.
The ministry also stated that the debt ratio was affected by exchange rate fluctuations and expected to be around 98% of the GDP, gradually decreasing over the next four years of the current fiscal year, ranging from 75% to 79% of the GDP.
The statement clarified that Egypt increased the support for subsidized commodities to 130 billion Egyptian pounds ($4.23 billion) in the fiscal year ending in June.
General revenues increased by 11.5 % to 1.501 trillion Egyptian pounds ($48.9 billion), while tax revenues increased by approximately 23.1%, according to a Finance Ministry statement.
The fiscal year in Egypt starts on July 1 and ends on June 30 of each year.
In a presser on Friday, Finance Minister Mohamed Maait noted that “without the rise in interest rates, exchange rate fluctuations, and inflationary effects, the rates would have been much better.”
He emphasized that “maintaining the deficit rate at 6.2% , considering the international variables and the urgent and continuous interventions to contain the negative repercussions and expand social protection networks, indicates the ability of the Egyptian state to effectively manage public finances.”
According to Maait, this is achieved through leveraging modern technology to enhance the governance of revenue and expenditure systems and directing financial allocations towards specified paths in line with national priorities, as reflected in the government’s action plan, consistent with Egypt’s Vision 2030.
The Kuwaiti National Assembly unanimously approved, Thursday, a law that allows the government to establish companies with the participation of Kuwaiti and foreign private sectors, specialized in establishing cities and residential areas.
The National Assembly approved in a special session a bill allowing the formation of companies specialized in the construction of new residential cities and referred it to the government.
Minister of Justice and Minister of State for Housing Affairs Faleh al-Rqubah said that approving the law will accelerate the pace of processing the housing applications.
During the Assembly’s discussion, the Chairman of Housing and Real Estate Affairs Committee, Hasan Johar, explained that the law is based on establishing joint stock companies to build new housing cities designated for housing care.
Johar elaborated that the aim is to create a partnership between the government, the citizens, and the investor in a way that guarantees benefit-sharing and earnings.
He recalled the benefits of such projects, noting that housing represents the third highest national income in Saudi Arabia, with increased profits.
The law focuses on preparing the infrastructure for mega projects in three cities to accommodate 100,000 housing units and guarantees the completion of all services, according to the official.
In turn, the committee’s rapporteur, Abdulaziz al-Saqobi, said there were 92,000 housing requests expected to reach 220,000 in 20 years.
Saqobi explained that residential real estate prices are skyrocketing, and according to some reports, their increase rate reached 19.5 percent in 2020/2021.
He indicated that there are more than 25,000 vacant lands in private housing, 15,000 monopolized by 146 people, negatively affecting Kuwaiti families.
The National Assembly finished discussing the report of the Parliamentary Housing and Real Estate Affairs Committee regarding proposals for laws on establishing companies to establish cities or residential areas and develop them economically.
The Assembly unanimously agreed on the new law enacted by the Housing Committee two weeks ago. It includes 40 articles divided into six chapters.
Before announcing the Initial Public Offering (IPO), the Public Authority for Housing Welfare must publish a summary study of the economic feasibility of the project company to be established and the plans for the cities or residential areas.
It must include the urban planning approved by the Corporation, the number of housing units to be completed, the various facilities to be established in each sector of the city or region, and the capital of each company based on the provisions of the law.
Under the law, the authority guarantees the safety of cities and residential areas, extending to ten years.
The UN World Tourism Organization (UNWTO) is set to launch the “UNWTO Women in Tech Startup Competition: Middle East” on September 27 in the Saudi capital city of Riyadh.
The initiative aims to empower women in the tourism sector and increase their presence, while also supporting pioneering technological projects in the Arab region.
Furthermore, it seeks to financially support participating women by attracting investors from around the world.
The competition aligns with Saudi Arabia’s drive to develop its tourism system, injecting 3 trillion riyals ($800 billion) in the coming years to establish colossal projects that support its plan of attracting 100 million tourists by 2030.
Relevant authorities in the Kingdom have already begun enhancing their workforce and supporting Saudi entrepreneurs in developing their specialized companies within the sector.
Additionally, efforts are being made to empower women due to their low participation in the tourism industry in the Arab region compared to the global average.
Natalia Bayona, who leads the innovation, education, and investments strategy of the UNWTO, told Asharq Al-Awsat that it is time to specifically focus on supporting talented women entrepreneurs in Saudi Arabia and the Middle East to shape the future of tourism in the region.
Women represent 34% of startup founders in the technology field in the region and over 50% of graduates in science, technology, engineering, and mathematics in the Arab world.
Therefore, the competition represents a convergence of empowering women, innovation, and tourism.
Tourism has a special impact on the lives of women and youth, as it is the primary sector in which they work at a global level, emphasized Bayona.
It is interesting to note that while women represent approximately 54% of the workforce in international tourism, they account for only 8% in the Middle East, she added.
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