|17 November, 2019

China's interest in MENA: Value of oil & gas projects led by contractors cross $75bln

Of the total value, $68.1 billion relate to projects in execution

FILE IMAGE: Prime Minister and Vice President of the United Arab Emirates and Ruler of Dubai Sheikh Mohammed bin Rashed al-Maktoum, Chinese President Xi Jinping and Abu Dhabi's Crown Prince Sheikh Mohammed bin Zayed al-Nahyan pose for a photo at the Presidential Palace in Abu Dhabi, United Arab Emirates July 20, 2018. WAM/Handout via REUTERS.

FILE IMAGE: Prime Minister and Vice President of the United Arab Emirates and Ruler of Dubai Sheikh Mohammed bin Rashed al-Maktoum, Chinese President Xi Jinping and Abu Dhabi's Crown Prince Sheikh Mohammed bin Zayed al-Nahyan pose for a photo at the Presidential Palace in Abu Dhabi, United Arab Emirates July 20, 2018. WAM/Handout via REUTERS.

Chinese contractors have been awarded $75.3 billion worth of oil and gas projects in the MENA region, data and analytics company GlobalData said.

Of the total value, $68.1 billion relate to projects in execution.  Regional spending in infrastructure developments that have a Chinese contractor totaled $13.8 billion in 2014 and almost doubled to reach $24.9 billion in 2018.

Yasmine Ghozzi, Economist at GlobalData, said: “The scope of China’s interest in the Gulf region has increased in recent years from a focus on hydrocarbon trade to a multitude of investments in energy, industry, finance, transport, communications and other technology.”

“Many Gulf countries also perceive China as a useful means in their strategies to diversify not just economically, but also politically amidst US-China trade war,” she added.

Chinese companies also expressed great interest in hubs across the region, given government initiatives such as Smart Dubai 2021, Saudi Arabia’s National Transformation Program 2030, Morocco’s Mohamed VI Tangier Tech City and the China-Egypt Suez Economic and Trade Cooperation Zone, the report said.

 “Chinese institutions are also establishing investment funds with Gulf sovereign wealth funds to finance projects related to Gulf diversification programs and the Belt and Road Initiative (BRI). For example, the UAE has established a $10 billion joint strategic investment fund between Abu Dhabi investment group, Mubadala, the China Development Bank and the Chinese State Administration of Foreign Exchange,” Ghozzi added.

(Reporting by Gerard Aoun, editing by Seban Scaria)

(gerard.aoun@refinitiv.com)

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