OPEC Stresses the Importance of Increasing Oil Investments

OPEC Secretary-General Haitham al-Ghais (Asharq Al-Awsat)
OPEC Secretary-General Haitham al-Ghais (Asharq Al-Awsat)
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OPEC Stresses the Importance of Increasing Oil Investments

OPEC Secretary-General Haitham al-Ghais (Asharq Al-Awsat)
OPEC Secretary-General Haitham al-Ghais (Asharq Al-Awsat)

OPEC Secretary-General Haitham al-Ghais stressed the importance of increasing investments in the oil sector to avoid any future volatility in the oil markets.

Ghais said that among the main challenges are the energy transition and the future of energy in general, adding that OPEC has adopted a policy that aims at embracing all forms of energy.

He added that OPEC's research studies have shown that oil will account for 29 percent of the global energy mix in 2045, highlighting another challenge related to investing in the oil sector, as the world requires nearly $12 trillion in investments in this sector alone.

The official explained that last year's challenges included the oil market's volatility and demand-supply unbalance, which led to a significant decline in investments.

Oil investments totaled some $500 million per year but decreased with the drop in prices in 2016, leading to a decrease in production capacity and investments after the COVID-19 pandemic, WAM quoted Ghais.

On OPEC's long-term demand-supply predictions, Ghais said that the organization has issued its 16th annual report during the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2022 in the UAE and noted that the organization believes that dependence on oil will continue even though previous predictions claim otherwise.

He highlighted the fact that oil demand in 2045 will reach 110 million barrels per day, compared to 99 million barrels at present, adding that OPEC's expectations also indicate that with population growth increasing by one billion and 900 million people, the demand for oil and energy will increase to fuel global economic growth.

It could witness a growth in its annual gross product of between 2.5 percent and 3 percent, reflecting demand levels.

He pointed out that OPEC's expectations also indicate an increase in energy demand by about 23 percent, from 300 million barrels equivalent to 350 million barrels in 2045. Meanwhile, oil demand levels will remain stable, and natural gas and renewable energy are expected to rise within the overall energy mix in the future while the share of coal will decrease.

On boosting investments in the oil sector, Ghais highlighted that investment delays are attributed to the sharp volatility in oil prices, adding that the role of OPEC and OPEC Plus consists of maintaining market stability.

The Sec-Gen stressed the importance of increasing investments in the oil sector to avoid any future volatility in the oil markets, and to promote investment in fossil energy.

UAE's policies aimed at ensuring global energy stability underscore its clear vision and critical role in being a safe international source of energy and oil supplies, in line with the main objectives of OPEC, said Ghais.

Since joining the organization, the role of the UAE has remained clear: to increase production, maintain economic growth, achieve diversification through other sources, and reduce costs.



Attractive Environment Drives Surge in Private Tourism Facilities in Saudi Arabia

Visitors flock to one of the events of “Riyadh Season 2024” (SPA)
Visitors flock to one of the events of “Riyadh Season 2024” (SPA)
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Attractive Environment Drives Surge in Private Tourism Facilities in Saudi Arabia

Visitors flock to one of the events of “Riyadh Season 2024” (SPA)
Visitors flock to one of the events of “Riyadh Season 2024” (SPA)

As Saudi Arabia experiences a surge in visitor numbers, there is a growing need to expand tourism infrastructure to keep up with demand.

In this context, the private facilities sector has emerged as a practical solution, contributing positively to increasing the income of local citizens who own these facilities.

This growth is reflected in the significant rise in the number of licenses granted by the Ministry of Tourism, which saw an increase of 333% in 2024 compared to the previous year.

In January, the Ministry of Tourism announced a new mandate requiring booking platforms and apps to exclude or refrain from listing unlicensed private hospitality facilities.

This move aims to ensure the quality of services provided to both local and international tourists across the Kingdom. The Ministry warned that any platforms violating this directive would face penalties.

This initiative is part of a campaign which seeks to enforce compliance with tourism licensing standards and regulations, ensuring facilities meet the criteria outlined in the Kingdom's Tourism Law and its accompanying regulations.

According to preliminary data from the Ministry of Tourism, the number of licenses issued for private hospitality facilities reached 8,357 last year, compared to 1,929 licenses in 2023.

Under the Kingdom’s Tourism Law, a private hospitality facility is defined as “any furnished and independent property unit, owned by an individual, licensed by the Ministry of Tourism, and offering daily accommodation services for a fee.”

Ministry spokesperson Mohammed Al Rasasimah emphasized that the growing number of licenses issued for private hospitality facilities reflects the ministry’s commitment to enabling individual investors in the hospitality sector to obtain the necessary operating licenses.

This initiative aims to enhance the quality of services provided.

He added that these efforts are part of the "Guests Are Our Priority" campaign, which seeks to strengthen compliance with licensing and classification standards and ensure facilities meet the conditions set out in the Tourism Law and its regulations.

Dr. Salem Baajajah, an economic expert and professor at King Abdulaziz University, told Asharq Al-Awsat that the significant growth in hospitality and tourism facilities is a result of the Ministry of Tourism's efforts to attract foreign investors.

He added that this expansion reflects a growing demand from international investors seeking to capitalize on opportunities in Saudi Arabia, aligned with the Kingdom’s Vision 2030 goal of increasing the number of tourists visiting Saudi Arabia.

He further explained that the tourism sector is experiencing notable growth, contributing to higher revenues for local citizens.