| RESILIENT REGIONAL ECONOMIES – OFFERING BETTER PROSPECTS |
One region that has stood up to the global financial meltdown successfully is the Middle East. Endowed with huge natural resources and supported by government measures, the regional economies weathered the economic slump and are now on track for growth.
Right from budgetary allocations to easing of bank lending and scrapping of minimum capital for setting up businesses, the UAE took every possible measures to revive its local economy and the results are seen in the form of restarting of several shelved construction and infrastructure projects, increase in industrial manufacturing and other manufacturing and businesses activities.
This has prompted international consultants and rating agencies to maintain a favourable outlook for regional economies, which augurs well for the metal working industry in the form of bigger and better orders for equipment, machinery and tools.
| OIL AND GAS SECTOR – HOLDING HUGE POTENTIAL FOR METAL WORKING SECTOR |
The global financial crisis has led to a whole lot of resetting in the industrial activities in the country, with the oil and gas sector re-emerging as the top target sector for the regional metal working, metal manufacturing and steel fabrication industry.
The Oil & Gas sector is poised to take advantage of the huge hydrocarbon potential of the six Gulf Co-operation Council (GCC) countries. The GCC nations control 45 per cent of the world’s recoverable crude deposits and more than 20 per cent of the global gas reserves at the end of 2008.
Closer home, the Abu Dhabi emirate is known for holding the largest hydrocarbon resources in the country, which accounts for 95 per cent of oil and 92 per cent of natural gas, thus accounting for nine per cent of the world's proven oil reserves.
The easing of the global crisis and signs of recovery in the world economy has triggered demand for crude and made it abundantly clear that the world’s reliance on the Gulf oil is inevitable and will grow in the future.
This has prompted these countries to press ahead with investments to pursue their capacity expansion plans and development of their production, exploration, refining, gas liquefaction and petrochemicals, and this offers good opportunities to the steel fabrication sector.
According to recent estimates, the GCC and other oil producers in the Middle East have to invest nearly US$385 billion in the next five years to fund hydrocarbon expansion projects.
The UAE comes second among the GCC states in terms of spending on new oil and gas projects, with the country accounting for US$21 billion a year, while Saudi Arabia spends US$30 billion, according to another projection. Abu Dhabi is set to spend more than US$50 billion on oil and gas projects over the next few years to increase its output.
| MAJOR OIL & GAS PROJECTS |
Here are some of the major projects in the region that are either underway, tendered or in the planning stages.
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Trans Sahara Pipeline: The 4,000 km gas pipeline runs from Nigeria to Algeria via Niger. |
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Al Shaheen Refinery in Qatar. |
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Nabucco Pipeline: The 3,300 km pipeline will run from Erzurum in Turkey via Bulgaria, Romania, and Hungary to Baumgarten an der March, Austria. |
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Yanbu Export Refinery in Saudi Arabia. |
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Khalifa Point & Fujairah Refineries: Two integrated refineries in the UAE and Pakistan. |
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Jubail Export Refinery in Saudi Arabia. |
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Integrated Gas Development is undertaken by the Abu Dhabi National Oil Company. |
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Abu Dhabi Crude Oil Pipeline: A 370km pipeline from the Habshan oilfields in Abu Dhabi to an oil terminal in Fujairah. |
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Kuwait Oil Co drilling platforms: Kuwait Oil Company is constructing 27 drilling platforms over 10 years. |
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Oman oilfield services contract: The project covers the maintenance and engineering services on Oman’s oilfields. |
| DEMAND FROM INFRASTRUCTURE & CONSTRUCTION SECTORS WILL CONTINUE |
Several billion-dollar infrastructure and construction projects continue to sustain demand for the industry in the country and the region.
Economic recovery is speeding up the rebound in the construction sector. After enduring a slowdown in 2009, real construction spending in the Middle East and Africa region is forecast to expand by 2.2 per cent in 2010. Construction activity in 2010 will be led by infrastructure spending, which is to grow by 3.3 per cent.
As construction markets continue to recover in 2011, total real construction spending is forecast to grow by 5.3 per cent.
The UAE civil building construction market has nearly 1,900 projects ongoing worth over US$650 billion, according to latest research reports.
According to another report, more than US$100 billion worth of infrastructure projects are underway or being planned in the UAE.
Abu Dhabi itself is spending US$1 trillion on infrastructure projects over the medium term to stimulate the economy.
The spike in spending on infrastructure and construction projects is sure to increase orders for related machinery and tools from the steel fabrication industry.