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Oil and Gas Jobs on the Way Up; Bahraini Economy Grows and Saudi Assets Surge

Middle East : 04 September 2011

Oil and Gas Industry Recruiting

Thousands of employment opportunities are opening up at oil and gas contracting firms in the UAE. Previously stalled investments are being restarted and demands for further advancements and safer platforms are coming through.

Lamprell has noted that bids currently lined up totalling nearly Dh 18.36 billion (or US $5 billion), covering refit projects and platform expansions. Lamprell has added staff to meet these demands and is now employing 13,000 with plans for another 1,000 openings by the end of 2011.

Petrofac, a UK oilfield services firm with operations in Sharjah and Abu Dhabi, have made announcements of new contacts with GDF Suez to service its North Sea operations.

IHS Global Insight energy analyst specializing in the Middle East, Samuel Ciszuk, noted that exploration and developments are currently gearing up. Expansions are being planned and renewed after oil firms scaled back in the recent past.

There has been recovery in oil prices this year. Brent crude futures hit a high in April, rising 18.8 percent from January’s levels. With indications of returning investments in the industry, considerable opportunities are being presented to businesses involved in oilfield services.

Lamprell’s net profits were reported at $18.6mn for the opening six months of this year, a 53.1 percent drop over last year’s figures due to a major acquisition. Company‚Äôs sales over the six month period more than doubled reaching $383.6mn with $316mn in new contracts. Upgrades, maintenance and advancements all played major roles in the orders placed by oil producers.

Lamprell acquired Maritime Industrial Services (or MIS) in May to increase the firm’s workforce and facilities.

Citigroup analyst Ryan Cauppila noted that Lamprell’s acquisition move has the firm well positioned in terms of production and exploration expenditures throughout the Emirates.

Economic Growth in Bahrain Hits 19.8 Percent

The second quarter has been good to the Bahraini economy, with major growth reported at 19.8 percent thanks to government efforts, according to data cited by senior officials.

Data reported by the CIO (or Central Informatics Organisation) sets growth at constant prices at 0.8 percent over Q2 in the previous year and around 1 percent up from 2009 figures.

Dr Mohammed Al Amer, president of the CIO, noted that bold moves from regional governments, such as those in the UAE and Saudi Arabia, have driven business sentiment up in Bahrain and brought positive changes in the private sector investment climate.

These positive moves will give foreign investors confidence in Bahrain, drawing them back, according to Dr Al Amer.

The Bahrain economy surged by 19.8 percent at current prices, mainly as a result of rising international oil prices, according to the CIO figures.

Oil accounted for 1.9 percent of that growth, with non-oil contributing 0.6 percent. At constant prices, retail banking grew by 3.7 percent, according to the data.

The growth in the service industries was stable. Goods producing industry grew by 2.9 percent, while communications and transport saw 8.6 percent growth. Government services grew by 4.9 percent, personal and social services were up by 12.9 percent, water and electricity by 17.3 percent and retail and wholesale trade grew by 1 percent. Fishing and agriculture experienced 8.3 percent growth, but real estate and construction, restaurants and hotels and business services fell by 1.8 percent, 17.4 percent and 3.8 percent, respectively.

Saudi Foreign Assets To Surge By More Than $94 Billion This Year

The IMF says that higher oil prices combined with more crude output will drive Saudi Arabia’s foreign assets up by over $94 billion this year, reaching a record high.

At the close of 2010 the net foreign assets of Saudi Arabia had reached about $441 billion. The most dominant oil exporter in the world is expected to report a record high $535.4 billion in foreign assets at the close of 2011. This represents an increase of almost $94.4 billion.

By June 30 of this year the total assets had hit $505 billion (or SR 1,897 billion), taking into account the deposits of commercial banks in SAMA (or Saudi Arabian Monetary Agency). This increase was due to a marked increase in revenues on oil exports, allowing the Kingdom to report massive current account and fiscal surpluses last year.

Despite the SR 40 billion fiscal deficit expected in Riyadh for 2011, the Saudi budget is forecasted to close the year with another surplus, even after substantial increases in public spending.

The IMF released a breakdown showing that the Kingdom’s foreign assets have progressively increased over the years as a result of rising crude production and higher prices. Saudi assets were reported at $310.3 billion at the end of 2007, climbing to almost $438.5 billion by the end of 2008 and falling back to $405.9 billion in 2009 due to dropping oil prices.

Increasing outputs and a price recovery pushed those net assets to $441 billion at the close of last year. Total assets were even higher, reported to be $454 billion (or SR 1,705 billion) with almost SR 61.4 billion in SAMA deposits included.

Saudi oil revenue is project to climb to just under $300 billion this year should oil prices go over $100 per barrel and Saudi supplies increase, according to the IMF. This would exceed the record set in 2008, $281.4 billion in income.

Even though the Kingdom is expected to record public expenditures that are 40 to 45 percent higher than budgeted, the surging revenue should transform the projected deficit into a decent surplus for 2011. The 2010 budget turned into a SR 109 billion surplus due to oil prices that rose at least $15 per barrel. The announced 2011 budget of SR 580 billion is a record high and includes a SR 40 billion deficit.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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