Aramco considers power assets sale: Report
The potential sale of four or five gas-fired plants that power refineries could alone raise around $4 billion.
The oil giant could divest assets such as housing compounds and pipelines, while port infrastructure assets could be up for sale too.
Port infrastructure assets might also be put up for sale, the sources said, noting that local companies—such as utility providers—could be interested buyers.
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Arab News
2 hours ago
- Arab News
Saudi Arabia's $2.5tn mineral reserves fuel industrial push
JEDDAH: Saudi Arabia is accelerating the development of its mining sector as a central pillar of economic diversification, with the Kingdom's mineral wealth now estimated at SR9.4 trillion ($2.5 trillion). The surge in value is driven by discoveries of rare earth elements, base metals, gold, phosphate, and titanium — a strong, lightweight metal with high-value applications in aviation and turbine manufacturing. A major catalyst for this growth is the Northern Borders region, home to SR4.6 trillion in resources and a key hub for phosphate production. Developments in Waad Al-Shamal have helped position the Kingdom among the world's top phosphate exporters. In alignment with Vision 2030 and the National Industrial Development and Logistics Program, the mining sector is projected to boost its contribution to gross domestic product from $17 billion in 2024 to $75 billion by 2030. It generated $400 million in revenue in 2023 and is now backed by a $100 billion investment plan targeting critical minerals by 2035. Speaking to Arab News, Saurabh Priyadarshi, a geologist and adviser for mining and metals at Geoxplorers Consulting Services, highlighted that Saudi Arabia's substantial reserves of gold, copper, phosphate, rare earth elements, and lithium position it as a potential global leader in the industry. 'Saudi Arabia can foresee itself becoming a key player in the global minerals supply chain. Calling these minerals critical is a different matter altogether,' he said. Priyadarshi added that one of the strongest diversification drivers is rising global demand for battery metals and industrial minerals that power electric vehicles and renewable energy infrastructure. 'As global markets push toward decarbonization, Saudi Arabia, too, can and should leverage its $2.5 trillion mineral resource base to power the next phase of industrial growth,' Priyadarshi said. Saudi Arabia is also prioritizing domestic resources and talent, promoting public-private partnerships, and adopting Fourth Industrial Revolution technologies to drive sustainable, long-term growth. Minerals central to 2030 plan Mansour Ahmed, an independent economic adviser, described mineral development as a strategic cornerstone of Vision 2030. He said Saudi Arabia's untapped reserves are 'critical to the global energy transition.' Ahmed stressed that growing the sector would expand non-oil GDP, generate employment, and drive regional development. He highlighted the importance of mining cities and downstream hubs 'to maximize local value and build integrated, resilient supply chains.' Both Priyadarshi and Ahmed noted Saudi Arabia's alignment of mining with advanced manufacturing and innovation. Priyadarshi pointed to Ras Al-Khair's aluminum smelter and the planned battery chemicals complex in Yanbu, developed in partnership with EV Metals Group, as examples of the Kingdom's industrial leap forward. Investments in automated mining technologies, AI-driven exploration, and ESG-focused practices reflect Saudi Arabia's ambitions to become a global hub for sustainable resource extraction. Saurabh Priyadarshi, geologist and adviser for mining and metals at Geoxplorers Consulting Services Saudi Arabia has also secured lithium processing capabilities, becoming the first Middle Eastern country to establish a battery materials supply pipeline. 'The government is leveraging its Public Investment Fund to finance mining and battery production, ensuring long-term supply chain resilience,' Priyadarshi said. He also cited strategic global moves, such as acquiring stakes in Vale's base metals division and developing domestic copper smelting, as reinforcing the Kingdom's ambitions in critical minerals. According to the Vision 2030 Annual Report for 2024, mining has been prioritized as a key sector for economic diversification. The report highlights significant reforms introduced to support this strategic shift, including the Comprehensive Mining Strategy and the Mining Investment Law — both designed to create a more attractive and transparent regulatory environment. Institutional support was reinforced through the establishment of the Ministry of Industry and Mineral Resources. Furthermore, the Saudi Geological Survey and the National Geological Database were launched to strengthen geological mapping and resource assessment capabilities. New entities such as Manara Minerals, the Mining Fund, and the Nuthree Exploration Incubator were also created to stimulate investment, innovation, and entrepreneurship in the sector. ESG and AI integration Priyadarshi emphasized that sustainability is integral to this transformation, with AI-driven exploration minimizing environmental impact, automation improving productivity and energy efficiency, and blockchain tools ensuring compliance with ethical, environmental, social, and governance standards. Saudi Arabia is also investing heavily in renewables to power its industrial base. Priyadarshi pointed to the Kingdom's $235 billion commitment to solar, wind, and hydrogen, including NEOM's $5 billion green hydrogen facility and a $35 billion phosphate and bauxite processing expansion at Ras Al-Khair. Ras Al-Khair Industrial City is home to Ma'aden's phosphate and ammonia plants, aluminum smelters, and steel production facilities such as Hadeed — showcasing the Kingdom's ability not only to extract, but also to process and add value to its mineral resources. The city is rapidly emerging as a strategic node in global supply chains. Priyadarshi noted that the Kingdom's strategy extends beyond resource extraction. He underscored the importance of integrating mining with downstream industries such as aluminum smelting, phosphate processing, and electric vehicle battery production to reinforce supply chains and develop high-value sectors that move beyond the export of raw minerals. 'Investments in automated mining technologies, AI-driven exploration, and ESG-focused practices reflect Saudi Arabia's ambitions to become a global hub for sustainable resource extraction,' he said. When asked about the most strategically important minerals for the Kingdom, Ahmed identified phosphate, rare earth elements, and gold as critical. He explained that phosphate is essential for food security and serves as a key driver of industrial exports, while rare earth elements such as neodymium, praseodymium, and dysprosium are vital for manufacturing EVs, wind turbines, defense technologies, and high-tech electronics — making them central to future-proofing the clean energy economy. 'Gold continues to hold significant financial value and remains an important mineral for the Kingdom. Copper and bauxite closely follow, given their growing importance in global electrification,' Ahmed added. Global rankings According to the Vision 2030 report, Saudi Arabia has achieved top international rankings in the mining sector. The Kingdom secured first place for mining investment growth, as reported by MineHutte and the Mining Journal. It also ranks among the top 10 countries for mining financial policies and holds the second position globally for efficient license issuance — taking approximately 90 days to issue a mining license. The report adds that Saudi Arabia's advanced legislative framework has attracted significant interest, with 290 local and international companies operating in the sector as of 2024. The National Geological Database has dramatically expanded its coverage from just 1.7 percent in 2021 to 51 percent by last year, enabling better resource identification. Investor confidence remains high, with 30 proposals submitted for the Kingdom's largest-ever mining tender in 2024, covering valuable mineral sites containing gold, silver, copper, and zinc.
Arab News
2 hours ago
- Arab News
2024: A year of fiscal discipline, economic growth
Saudi Arabia has released its 2024 fiscal results, highlighting how structural and fiscal reforms have strengthened economic resilience and improved the ability to navigate global challenges. These reforms have driven robust, non-oil sector growth, reduced unemployment to record lows, and kept inflation below global averages. The government remains committed to advancing fiscal policies that reinforce economic stability and ensure long-term sustainability. These measures have supported the Kingdom's development agenda while maintaining fiscal discipline, stimulating growth and preserving healthy public reserves and debt levels. In 2024, total revenues exceeded the approved budget by about 7.4 percent, thanks to stronger-than-expected oil and non-oil performance. Higher oil revenues were driven by performance-linked dividends, while non-oil revenues rose 14.1 percent over the budget, reflecting the expansion of non-oil activities and continued efforts to strengthen non-oil revenue streams. Total expenditure rose by about 9.9 percent over the approved budget, reflecting significant progress toward Vision 2030 goals and the execution of key projects. This increase was also driven by advancing some expenditure originally planned for future years, raising both operational and capital spending. The higher spending supported efforts to sustain and enhance social programs, mitigating the impact of economic changes on targeted beneficiaries. Additional measures focused on improving public service quality, enhancing quality of life, empowering the private sector and creating a more attractive investment climate. The actual fiscal deficit for 2024 was around SR116 billion ($31 billion), or 2.5 percent of gross domestic product, exceeding the approved deficit of SR79 billion (1.9 percent of GDP). By the end of 2024, public debt rose to nearly SR1.2 trillion, about 26.2 percent of GDP, up from SR1.1 trillion a year earlier. Government reserves stood at roughly SR390 billion. The General Authority for Statistics reported a decline in real GDP growth for 2024 compared to the budgeted forecast of 4.4 percent, mainly due to a 4.4 percent drop in oil sector activity. This reflects the Kingdom's voluntary production cuts under the OPEC+ framework and its commitment to energy market stability. Despite the decline in the oil sector, non-oil sectors outperformed projections, growing by 5.2 percent and driving overall real GDP growth of about 2 percent. This was supported by ongoing economic diversification and structural reforms that boosted activity. In 2024, the Kingdom recorded an inflation rate of 1.7 percent, well below the global average and the budgeted estimate of 2.2 percent. These results underscore the government's strong commitment to Vision 2030 through responsible fiscal policy, targeted investments and broad economic reforms. Despite a challenging global environment — marked by oil market volatility, inflationary pressures, and geopolitical uncertainty — the Saudi economy showed resilience, adaptability, and steady progress toward diversification. Structural and fiscal reforms enabled the government to navigate 2024's challenges, driving strong growth in non-oil activities. These reforms also lowered unemployment to a historic 7 percent in 2024 and kept inflation well below global trends. The government remains committed to forward-looking fiscal policies that support economic stability and ensure long-term sustainability. Maintaining low inflation, boosting non-oil revenues, and expanding non-oil activity have helped mitigate risks from declining oil revenues and price volatility. These achievements highlight the effectiveness of the reform agenda and the Kingdom's commitment to a diversified, sustainable economic future. With public debt at sustainable levels and reserves healthy, the Kingdom is well-positioned to advance its transformative agenda. Looking ahead, Saudi Arabia reaffirms its commitment to enhancing competitiveness, improving citizens' quality of life, empowering the private sector, and building a vibrant, inclusive economy. Through fiscal discipline, innovation, and strategic investment, the Kingdom aims to strengthen the foundations of long-term sustainability and prosperity — balancing growth with fiscal prudence under its expansionary spending policies. • Talat Zaki Hafiz is an economist and financial analyst. X: @TalatHafiz
Arab News
2 hours ago
- Arab News
Scent economy rises as Gulf fragrances shape identity and status
RIYADH: In the Gulf, fragrance and its various perfume notes are increasingly seen not just as personal accessories but as symbols of identity, refinement, and wealth. From morning rituals with oud to intricate perfume layering before gatherings, the scent economy is booming across the Gulf Cooperation Council region. This regional passion has fueled a multi-billion-riyal industry, deeply rooted in tradition, yet continually evolving through innovation. According to a recent report by Research and Markets, Saudi Arabia's perfume market is projected to grow from $2.12 billion in 2023 to $3.57 billion by 2033, registering a compound annual growth rate of 5.94 percent. Demand for high-end and artisanal fragrances, greater ecological awareness, and the rise of online commerce are reshaping the market. From ritual to refinement In the Gulf, fragrance is more than just an aesthetic choice; it's a cultural expression, often beginning with the application of Royal Cambodian oud, followed by the practice of layering complementary scents. Both Rasasi and Lattafa Perfumes, major fragrance brands across the GCC, emphasize how deep-rooted traditions are central to the region's distinctive scent profile. 'Scent is deeply embedded in the cultural and spiritual fabric of the Gulf. Unlike Western fragrance preferences that often lean toward freshness or minimalism, the GCC palette is bold, sensual, and opulent — driven by heritage ingredients like oud, amber, rose, and saffron,' said Talha Kalsekar, head of marketing at Rasasi Perfumes. He added: 'These are not seasonal indulgences but part of daily rituals — from welcoming guests to post-shower layering. It's also a multi-sensory form of expression: to wear scent is to project dignity, refinement, and often, status.' Echoing this, Fragrance Development Head at Lattafa Perfumes, Abdul Rahim Shaikh, said: 'Scent in Gulf culture is symbolic, it signals pride, hospitality, and self-respect. Certain notes like oud, musk, rose, and amber aren't just popular, they are integral to religious, social, and even business rituals.' This cultural resonance influences both the composition and consumption of perfumes. From layering of oils, sprays, and incense to the use of oud, musk, rose, and saffron, these ingredients are not trends, but mainstays. The modern customer Both brands are experiencing a shift in their customer base, now engaging with a more informed and expressive clientele, one that values storytelling, sustainability, and personalization just as much as the quality of the scent itself. 'Consumers in the GCC are no longer just buying scents — they're curating olfactory wardrobes. They understand ingredients, appreciate craftsmanship, and are willing to spend more on exclusive blends, limited editions, and artisanal formats,' Kalsekar said. Lattafa highlighted this evolution as well: 'They are looking for emotional connection and long-lasting quality ... The preference leans toward intense, long-lasting, and layered compositions.' This growing discernment has given rise to gender-neutral perfumes, higher concentrations such as extrait de parfum, and niche storytelling, especially popular among younger demographics. This is also evident in the rise of demand for full-scent experiences, including body oils, hair mists, and incense-inspired aromas. Tech meets tradition Innovation is a defining trait of the evolving fragrance economy. Both Rasasi and Lattafa are integrating artificial intelligence to personalize experiences and streamline product development. 'We're actively exploring the intersection of scent and technology. While our roots are artisanal, we recognize the value of AI in streamlining formulation processes, especially for large-scale testing and trend forecasting,' said Kalsekar. He added: 'We're also experimenting with in-store scent personalization tools — allowing customers to co-create their fragrances.' Lattafa is also blending AI modeling with traditional craftsmanship. 'While we remain deeply committed to the artistry of perfumery, we're exploring the role of AI and personalization to enhance consumer experience. We're currently working on tech integrations that allow for better digital scent discovery and curated recommendations across our e-commerce platforms,' Shaikh said. Although AI can be a tool for personalizing scent creation, Shaikh emphasized that it will not replace intuition and tradition. The digital dimension With Saudi Arabia's population becoming increasingly digital-savvy, brands are investing heavily in online infrastructure to align with changing shopping behaviors. Social media and e-commerce platforms now serve as essential tools for storytelling, customer engagement, and market expansion. In parallel with these digital shifts, Beautyworld Saudi Arabia, the largest trade fair for the aesthetics industry in the nation held in Riyadh in April, offered a tangible platform for brands to establish a physical presence in the Kingdom. Consumers in the GCC are no longer just buying scents — they're curating olfactory wardrobes. They understand ingredients, appreciate craftsmanship, and are willing to spend more on exclusive blends. Talha Kalsekar, head of marketing at Rasasi Perfumes The event also included several business matchmaking sessions and panel discussions, enabling regional and international fragrance brands to network, explore distribution deals, and assess market entry strategies for Saudi Arabia's growing luxury sector. Fragrance World Perfumes, for example, used its debut at the 2024 edition of the event not just as a launchpad, but as a bridge between its global digital identity and on-the-ground consumer engagement. Operating in over 125 countries, the UAE-based manufacturer leveraged the gathering to showcase multiple fragrance lines and reinforce its commitment to the Kingdom's growing beauty and luxury sectors. Lattafa, in particular, is capitalizing on social media virality, citing how fragrances like Khamrah have gained traction on platforms such as TikTok and Instagram. Shaikh noted that fragrance today is not only worn but also seen and shared, becoming both a visual and cultural phenomenon. Rasasi also views digital and physical retail as intertwined. 'Physical retail remains essential — it's where the emotional connection to scent is first made. So we see online and offline not as competitors, but as complementary chapters of the same brand experience,' said Kalsekar. Luxury, loyalty and local pride Saudi Arabia is facing intense competition from both global and regional players in the industry. While brands like Chanel and Dior retain their prestige, homegrown names like Abdul Samad Al-Qurashi and Arabian Oud dominate through cultural connection. A half tola, or around 6 milliliters, of Royal Cambodian oud from Arabian Oud costs SR600 ($160). To remain competitive, physical retail continues to adapt. Ghawali, the Chalhoub Group's fragrance brand, launched a flagship store in Riyadh's Nakheel Mall in January 2023, blending modern design with traditional elements and preparing to unveil a Saudi-inspired fragrance collection. Further emphasizing cultural continuity, the 'Perfumes of the East' exhibition held in May 2024 under the patronage of Prince Badr bin Farhan, displayed over 200 artifacts at the National Museum in Riyadh. The show celebrated the Arab world's enduring relationship with fragrance. Fragrance outlook The Eau de Parfum segment is forecasted to dominate due to its longevity and intensity, qualities valued in the region. Fragrance demand is expected to continue growing, driven primarily by the youth market, primarily comprising urban consumers aged 20 to 40, with women leading the way in consumption. Import duties and high costs remain barriers, but these challenges have led to a rise in regional manufacturing and increased interest in niche local offerings.
