• Oil and gas sector candidate to achieve modest gains this year


    Improved global demand and the stability of Saudi production
    Oil and gas sector candidate to achieve modest gains this year

    A recent report said the GDP decline for the oil and gas sector at a rate of 0.6 per cent in 2013, expected to achieve modest gains in the sector by 2014. Second quarter report attributed the 2014 national commercial bank and Dan & Bradstreet to Southeast Asia, Middle East, business optimism results in the drop to declining crude oil production (the average production of the Kingdom's oil 9, 76 million barrels per day in 2012 to 9, 64 million barrels per day in 2013, according to OPEC). However, the increased production of natural gas and natural gas liquids was somewhat offset lost and production increased of oil from 9, 64 million barrels a day to 9, 77 million barrels per day in the month of January 2014 to 85 million barrels a day in February, is expected to continue to produce crude oil in Saudi Arabia's stability at high levels for the first half of the year 2014, Assuming that political tensions in other oil-producing States (such as Libya and Iran and a few other States in the Middle East and North Africa) is likely to continue, while the global demand for crude oil. In addition, it is likely that less supply disruptions from the oil-producing States gradually during the year, the pace of decline will demand for Saudi oil production. However, the average oil production in 2014 is projected to increase over the past year to promote the GDP of the oil and gas sector. In addition to the GDP gains for oil and gas sector, is expected to improve the performance of the Saudi economy in the quarters of the coming year in the growing strength of non-oil and gas sector. Expected non-oil and gas sector to gain momentum from domestic demand as a result of rapid population growth continued in the Kingdom and continued government spending on infrastructure. Dr. Saeed Shaikh confirmed for the ' economic ', Chief Economist of the national commercial bank, and the GDP in the current year decline in production and decline in the contribution of the oil sector 0.6 percent. on the other hand, the acceleration of the Kingdom in employment poses a negative on prospects for the overall economy because it is likely to increase the operational costs of the private sector during the coming quarters, as well as it will delay the implementation of projects as a result of restrictions on employment. In addition, the Government has slowed down the pace of increase in the expenditure budget of the current declared in 2014 from 20 per cent in 2013 to 4.3 per cent in 2014. Although this is a significant decline in the growth rate, but spending levels remain high enough to maintain growth in the non-oil sector and ensuring that domestic demand growth. Sherihan Elmanzalawy, commented Economist at national commercial bank results of the survey by saying: ' while the prospects for the investment environment has shown a decline, with the percentage of companies planning to invest in expanding its business from 59 per cent in the first quarter to 47 per cent in the second quarter, but he said 62 percent of survey participants lack of negative factors affecting business in the second quarter of 2014. This confirms the stability of the business environment; the optimism index of non-oil and gas sector scored 50 points in the second quarter, a slight increase over the level in the first quarter. However, the Government remains the biggest challenge for about 14 per cent of the survey participants; their impact was highest in the transport, storage and communications by 23 per cent of the participants in this sector in the second quarter. With regard to new policies and their impact on business, there has been no improvement from the first quarter, whereas 41% of companies still refer to adverse effects, particularly in high cost of employment and also on the availability of skilled labor. The trade sector and the hotels much optimism among all sectors but the oil and gas sector for the fourth quarter of the year; improved prospects in all components of the index. The 53 per cent and 62 per cent of the companies involved in the oil and gas sector and the oil and gas sector, respectively, in the absence of any negative factors that could affect their business in the second quarter of 2014, while competition and governmental procedures and also the availability of skilled labor is the most important challenges facing the rest of the companies.

    Either the oil and gas sector, reflecting the value of business optimism index for the oil and gas sector has improved markedly in the second quarter of 2014, on an annual basis (index of optimism to the oil and gas sector 49 points for the second quarter of 2014, compared with 31 points for the second quarter of 2013), except that the index had fallen by one point compared to the previous quarter, while the index reached its highest level in two years. The index continued to record positive prospects based on expectations for new projects. The survey showed that business confidence as regards selling prices offset weakness in expectations of profitability and employment. The optimism index of selling prices by eight points from the previous quarter, as the majority of the participants (48 percent) plans to increase its selling prices as a result of the higher cost of raw materials and operating expenses. On the other hand, the optimism index of profitability by four points compared to the previous quarter as a result of the rising cost of raw materials and labor cost. And employment optimism index fell by 18 points to score 50 points, with 8 per cent of the participants are planning to reduce employment to reduce Costs. And comparative manner, according to the results of the previous quarter, none of the participants noted their intention to reduce the number of employees.

© All Rights Reserved for Asharqia Chamber