Short conflict with Iraq could bolster Gulf economy
A short conflict with Iraq is forecasted to bolster the Gulf economy, said executives from the region’s oil, gas, power and water sectors in a recent Middle East Infrastructure Development Congress (MEIDC) survey.
The study reveals that the Iraq scenario has been discounted in all business plans. According to the interviewees, the regional market is becoming increasingly competitive. Several financiers stressed that the market is currently cautious about new apex projects and that there is excess liquidity in the capital markets, producing downward pressure on rates of return.
Opportunities included the potential vast scale of new projects in a post-conflict Iraq; the continued opening up of Iran; the increasingly forward-thinking approach evident in Qatar; and the prospect of meaningful progress in Saudi Arabia.
Risk management is much higher on the corporate agenda than ever before. This has made companies much more selective on the types and volumes of projects that they bid on. The majority of interviewees were bullish on the future prospects in their market segment. Threats included an extended Iraq conflict scenario; a collapse in oil prices; and potential political destabilization in key countries.
The recently conducted preliminary research process involved conducting face-to-face interviews with 20 senior executives. The sample included large energy companies, project developers, bankers, and advisory firms. — (menareport.com)
© 2003 Mena Report (www.menareport.com)