News

A warm welcome to HFI’s July 2024 eNewsbook. Please click here for the interactive flipbook version, and please click here for the static PDF version.

July has seen Kuwait announce a huge offshore oil and gas discovery in the Al-Nokhatha offshore field, with KPC disclosing an estimated 3.2 billion barrels of oil equivalent and 5.1 trillion cubic feet of gas reserves. This discovery is expected to significantly bolster Kuwait’s status as one of the major oil producers within OPEC, contributing to the global oil and supply. This also means that Kuwait will now join Saudi Arabia, Qatar and Abu Dhabi as a major offshore market for the supply chain in the GCC.

Across the wider GCC, the EIC (Energy Industries Council) DataStream project database is now tracking 497 energy projects with a total value of US$720 billion in the GCC in the period to 2030 and this will soon witness a further major increase in the future numbers from Kuwait.

Across the border, Saudi Arabia remains one of the most prospective global energy markets in the period to 2030 with US$226bn of energy projects being tracked by the EIC Datastream. HFI has launched the summer edition of our Saudi Arabia Ventures Initiative (SAVI) eGuidebook which highlights the importance of well-structured local partner ventures as a key aspect of success in the Saudi energy market.

From a regional perspective, HFI was delighted to introduce our “Establishing a Middle East Regional Presence” eGuidebook. Middle East business expansion is typically originated by one or more local partner ventures but sooner or later the need to establish a Middle East regional presence will become compelling. HFI is often asked to plan and implement international group structures and the default position is the establishment of a DMCC free-zone company to serve this purpose.  We explore the advantages/disadvantages in this eGuidebook.

However, the Middle East seems increasingly out of reach for many SMEs given the challenges of margin pressures, increased costs, localisation pressures, long-haul vendor approval processes and increased taxation. It’s a challenging market, especially for SMEs, and historically failure rates or instances of under-performance to expectation are too high. HFI’s view for many years now is that SMEs should look to clustering opportunities if they are to breakthrough and grow on a sustainable basis. HFI has developed its Bridgehead Cluster Venture (BCV) business model as a potential new route to market for SMEs: the process of establishment is accelerated, reducing the time and costs to revenues, while increasing the prospects of a successful venture and lowering the risk of failure. We look forward to ongoing dialogue with key clients and connections on this subject matter.

Next month with see the start of some key conference events starting with ONS2024 in Stavanger and culminating with ADIPEC 2024 in Abu Dhabi in November; we look forward to catching up with clients and connections at these events. Coming up on the 3 September, the EIC is hosting its Middle East Technology Showcase in Abu Dhabi. This is an excellent opportunity to highlight innovative technologies spanning across the entire energy sector and we would encourage clients and connections to contact Ryan McPherson at EIC if they are interested in participating.

I hope the features in our July eNewsbook will be of interest and please contact Sally Reeves, HFI's Client Relations Manager, to arrange a call if we can be of support in your MENA business ventures.