Monday, 31 December 2018

Gulf Arab Energy Firms May Lean on Debt in 2019 as Oil Falters - Bloomberg

Gulf Arab Energy Firms May Lean on Debt in 2019 as Oil Falters - Bloomberg:

Gulf Arab energy companies are expected to borrow more in 2019 to finance expansion plans after rising oil prices triggered a sharp retreat from debt markets in 2018.

Higher oil prices eased pressure on government budgets in Gulf Cooperation Council countries in 2018 and allowed the region’s energy companies to self-finance operations, according to Rory Fyfe, Chief Economist at MENA Advisors. That’s a shift from 2017 when lower oil prompted companies to issue record debt.

This dynamic could be repeated in 2019. Average oil prices hit a 4-year high in 2018, but ended the year on a dismal quarter that clouded the outlook for 2019. With global benchmark Brent crude down about 35 percent since October, energy companies in the region may have to accelerate their borrowing again.

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