Gulf energy companies borrow to finance expansion plans in 2019 Power and Energy

GCC energy companies are expected to move towards more borrowing in 2019

To finance expansion plans after high oil prices caused a sharp reversal of debt markets in 2018

Rising oil prices have eased pressure on government budgets in the GCC over the past year and allowed energy companies in the region to fund their own operations, the Bloomberg news agency reported.

"This is a shift from 2017 when low oil prices pushed companies to issue record debt," said Rory Fife, chief economist at Mena Advisors.

This dynamic can be repeated in 2019, with average prices reaching a four-year high in 2018, Fife said.

But ended the year down, overshadowing the outlook for the new year.

With the world's benchmark Brent crude falling 35% since October, the Gulf region may have to accelerate borrowing again.

Ashley Keithy, an oil and gas research analyst at Cantor Fitzgerald, said companies would look to issue more debt as projects needed to be financed, crude reserves replenished and debt markets going to move because they are still relatively cheap.

State-run companies in the UAE, Oman and Bahrain went to the bond market in 2018, with energy companies borrowing more than $ 9 billion.

This comes at a time when Saudi Aramco has issued $ 150 million in debt through one of its subsidiaries, the lowest level since 2014.

Although Saudi Arabia is the world's largest crude oil exporter, it has yet to absorb the 2018 index, and state-owned Aramco may issue next-year bonds and loans to finance a deal that will permanently change regional debt schedules.

Saudi Aramco is considering a range of options to raise $ 80 billion needed to buy a majority stake in Saudi Basic Industries Corporation (SABIC).

The expansion continues to be a major area for energy companies in the GCC, especially Saudi Arabia, the United Arab Emirates and Kuwait, despite plans to cut production and boost prices.

Oil and gas producers in these countries plan to spend more than $ 600 billion on energy projects over the next decade.

Abu Dhabi National Oil Company, which was responsible for more than half of the debt issued in the UAE last year, plans to boost crude production capacity to 4 million barrels per day by 2021 compared to the current ceiling of 3.5 million barrels.

The UAE company will spend $ 132 billion on expansion projects over the next five years, increasing access to more energy loans.

Oman's energy companies issued record debt in 2018 as the region's largest oil producer outside OPEC used a $ 4.6 billion loan to finance a refinery in the Duqm area. Gas companies in the country borrowed $ 1.1 billion to finance operations