Gulf

1. Gulf-US energy optimism
2. ADNOC’s AI bet
3. Iraq turns to LNG
4. Saudi data center surge
5. Gulf FDI declined in 2024

Hope for Saudi theaters hinges on local films.

Energy needs an ‘and-and’ approach

Humanity must not choose between renewables and fossil fuels, we need it all: That was the main theme that the CEOs of two of the world’s largest energy companies — Amin Nasser of Saudi Arabia’s Aramco and Sultan Al Jaber of the UAE’s ADNOC — pressed during CERAWeek, the oil and gas industry’s main annual conference.

Al Jaber, the former COP28 president, said the consensus from that summit “injected energy realism into the climate process” and that in order to cater to the needs of a growing global population “we need an ‘and-and’ approach” that includes hydrocarbons, renewables, and nuclear. Nasser — speaking after US Energy Secretary Chris Wright, himself a former energy executive who was bullish on the industry — carried on the feeling of triumph for oil and gas. “We can all feel the winds of history in our industry’s sails again,” Nasser said.

The remarks, while unsurprising for energy executives, come as global climate action recedes and energy consumption rises: Power demand in the US, for example, is growing after decades of stasis. It’s also a moment when many countries are concerned about energy security after wars and sanctions disrupted supplies.

Abu Dhabi taps AI for oil

The amount Abu Dhabi National Oil Co. (ADNOC) will spend on a three-year contract to deploy artificial intelligence tools in all of its oilfields. ADNOC plans to roll out technology this year that it says will enhance productivity, compressing monthslong projects into a matter of days. To do so, it will rely on AIQ — a joint venture of Abu Dhabi-backed AI firm Presight and ADNOC, and which counts the UAE oil producer as its largest customer. AIQ has worked with Microsoft and Presight parent G42 to make the energy industry more efficient: Its AI applications aim to speed up the extraction of fossil fuels while also helping ADNOC reduce carbon emissions.

Iraq accelerates LNG import plans

Iraq is building a permanent offshore liquefied natural gas terminal, joining a growing list of nations turning to LNG imports for long-term energy needs. Baghdad was forced to accelerate construction, according to news site AGBI, after the US revoked a waiver allowing purchases of Iranian gas via pipeline, part of Washington’s efforts to reapply “maximum pressure” on Tehran.

Baghdad’s shift to LNG imports comes as global production surges. Iraq is in talks with Qatar, which plans to expand overall output by 85% by 2030, for supplies. ADNOC Gas is also doubling its capacity. And the US — now the world’s top LNG exporter — is ramping up production and is expected to capture a third of global market share by the end of the decade.

Riyadh to lead data center growth

Riyadh has emerged as the fastest-growing market for data centers in the Middle East, catching up with Abu Dhabi and Dubai in the race to build up the power and capacity needed to fuel the AI boom. The Saudi capital plans to grow its capacity at almost double the rate of the UAE’s two biggest cities through 2027, real estate services firm Jones Lang LaSalle told Bloomberg. The UAE leads the region in computing capacity, followed by Saudi Arabia.

With the requisite money, space, and energy, the Gulf is investing heavily in AI infrastructure. Data center deals in Saudi include a $1.5 billion commitment by US-based AI firm Groq and Aramco Digital, as well as a $500 million investment from US-based Salesforce.

Foreign investment slumps again

The amount of greenfield foreign direct investment into the Gulf fell for the second year in a row in 2024, but the UAE made a mark in outflows. The two biggest regional markets had sharp declines, according to Dubai-based bank Emirates NBD. Investments into the UAE fell by a third to $14.5 billion and by 28% in Saudi Arabia to $22 billion — far worse than the global slump of 7%. There were still a few bright spots. The value of US-backed projects in Saudi rose sharply, driven by large data center deals, helping to offset a sharp fall in Chinese spending. The top destinations for investment globally were the US, China, the UK, and India — and the biggest sectors included renewable energy, tech, metals, and oil and gas.

Sovereign Wealth

• The Public Investment Fund launched Saudi Arabia’s first duty-free retailer, Al Waha (translation: the Oasis), tapping the kingdom’s growing tourism sector and continuing on a trend of inward investment.

Checking In

• The Omani city of Salalah, a tourism magnet during the wet Khareef season (some Gulf residents long for rain), is set for a revamp later this year. Oman’s urban planning authority has unveiled a masterplan for the city’s waterfront to include climate resilience measures, 12,000 new residential units, a new public beach, and a marina. — Muscat Daily

Entertainment

• Kimbal Musk, Elon’s brother, is bringing his drone show to Abu Dhabi. His company, Nova Sky Stories, signed a deal with the Department of Culture and Tourism to deploy up to 10,000 drones for large-scale light shows.

Finance

• Dubai’s biggest bank Emirates NBD is reportedly considering acquiring a stake valued at around $1 billion in Banque Du Caire, a lender the Egyptian government has been trying to privatize since at least 2018. — Enterprise News UAE

Property

• No ghost towers in Dubai: Office occupancy was above 95% in prime locations like DIFC and Business Bay, and average lease rates surged 9.1% in the second half of 2024.

A local film is reviving enthusiasm for the moviegoing experience in Saudi Arabia — and just in time. Box office sales have been falling in the kingdom since a 2022 peak after the ban on cinemas was lifted in 2018. But Saudi filmmaker Abdulaziz Alshlahei’s drama Hobal is approaching the Saudi box office record of $10.8 million.

“This year will be a critical one for Saudi films,” critic Ahmed al-Ayyad told the Financial Times. “There is a whole generation of filmmakers who grew up in the era of cinematic openness, and a whole generation of audiences who do not remember what it was like to travel to Bahrain or Dubai.” Meanwhile, the movie business is alive and well in NEOM, where a 40% cash rebate on production has lured at least 40 local and international filmmakers in its first four years, according to Al Arabiya, which was allowed rare access.

The CEO of the largest US electricity provider criticized the Trump administration’s decision to double down on gas-fired power to solve the looming power shortage in the US spurred by AI.

John Ketchum, CEO of NextEra Energy, told Semafor’s Tim McDonnell on the sidelines of the CERAWeek summit in Houston that the cost of gas turbines and the skilled labor to install them are both up three-fold from just two years ago, and that renewables and batteries are the cheapest, fastest, and easiest way to meet the power demand from data centers.