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Page added on December 31, 2008

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More Gulf industrial projects at risk after Dow

DUBAI (Reuters) – More Gulf projects may go the way of Kuwait’s aborted $17.4 billion deal with Dow Chemical or be renegotiated as states take a hard look at spending amid the global financial crisis and an oil price slump.

Gulf Arab states — which form the Gulf Cooperation Council (GCC), a loose economic bloc — have enjoyed a six-year boom on the back of soaring oil prices. But oil export revenues have shrunk as crude fell from a record above $147 in July to $38 at the year end.

Coupled with the financial crisis, this has led to a big push among Gulf states to revisit contracts as prices in general fall.

“Many projects in the Middle East involving foreign partners are expected to be at least delayed until the credit crisis is over,” said John Sfakianakis, chief economist for HSBC’s Saudi subsidiary SABB bank in Riyadh.


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