صشىيغشا رظ ى اىىفبء ىزنش اىذبى ىيزقبػذ ثبىششمخ اىقبثضخف جى أسشي سائغ ظذ اىيجخ اىقبثخ ىيؼبي ثبىششمخ اىقبثضخ

صال وصيخ اىذبى ىيزقبػذ ثبىششمخ 101ىصشىيغشا دفال ىزنش

ثذضىس اىغبس سبخ اىذف سئس 2014اىقبثضخ وقغبػبرهب خاله ػب

ذذ "سئس اىقبثخ اىؼبخ ىيقو اىجىي و" دس شذبره " صشىيغشا و

.سئس اىيجخ اىقبثخ ىيؼبي ثبىششمخ اىقبثضخ " خشجه

وقذ أػشة اىغبس سبخ اىذف ػ سؼبدره ثذضىس اىذفو اىزي جسذ ؼ

اىىفبء واىؼشفب ثبىجو ألثبء اىششمخ اىز ثزىىا اىىقذ واىجهذ ىشفؼخ

اىششمخ اىىعخ ووضؼهب ف صبف ششمبد اىغشا اىؼبىخ، وقب ثصبفذخ

جغ اىنش وذه شهبداد رقذش ونبفأح بىخ رقذشا ىجهىده خاله

وأمذ ىه أ صشىيغشا سظو ثبثهب فزىدب دائب أب . األػىا اىبضخ

أثبئهب

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)ربثغ(

سئس اىيجخ اىقبثخ ثبىششمخ اىقبثضخ " ذذ خشجه" بدخ أخشي رقذ

ثبىشنش ىجغ اىذضىس وػي سأسه اىغبس سبخ اىذف ػي سػبزه

اىنشخ ىهزا اىذفو ورقذ ثبىزهئخ ىيسبدح اىنش زب ىه اإلسززبع

ثبىشديخ اىجذذح دبره وأ ىفق اهلل اىؼبي اىذبى ف إسزنبه

.سشح اىجبح خبصخ وأ اىششمخ ػبشح ثبىنىادس اىجششخ اىزضح

قب ثزقذ اىذفو ػجذ اىؼظ صذق ػضى اىيجخ اىقبثخ وسزشبس اػال

سئس اىششمخ اىقبثضخ ىيغبساد واىالدخ اىجىخ واىششمخ اىقبثضخ ىصش

ىيغشا، مب أششف ػي رظ اىذفو اإلداسح اىؼبخ ىيؼالقبد اىؼبخ واإلداسح

اىؼبخ ىيذػبخ واإلػال ثبىششمخ اىقبثضخ ىصش ىيغشا

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وصش اىغشا ىـ »اىىادي«: سزؼذو إلجالء اىصش ىجب .. وزظش

رؼيبد اىخبسجخ

امذ اىغبس دسب مبه وصش اىغشا اىذ ف رصشخ خبص ىيىادي ، ثب

صش ىيغشا ػي ار االسزؼذاد الجالء اىصش ف ىجب ، ػذ صذوس

.رؼيبد وصاسح اىخبسجخ ثزىل

وأوضخ أه سجق ور اجالء اػذاد مجشح اىصش اىؼب اىبض ثبىزسق

. غ وصاسح اىخبسجخ ، ػ عشق رجؼه ثزىس

وقبه وصش اىغشا ، ثب صش ىيغشا رىقفذ ز فزشح ػ سدالرهب

ىيغبساد اىيجخ ثسجت االوضبع االخ هبك، ثشنو زؼبسض غ اال

واىسالخ اىجىخ ، وىن هبك ششمبد ىجخ رؼو غبساد ىجخ اى ثشج

. اىؼشة

و بدخ أخشي أوضخ اىىصش، ثب هبك رسق دائ غ وصاسح اىسبدخ ،

ىزشظ اىذشمخ اىسبدخ ، ف اىذ اىسبدخ اىصشخ، ورىل ثؼو اسؼبس

. خبصخ ورخفضبد ف اىشسى ىششمبد اىشبسرش االججخ واىصشخ

http://elwadynews.com/news

اػال اىغىاسئ ثغبس اىقبهشح اثش اجؼبس دخب عبئشح صش

ىيغشا

أعلج سلطاث هطار القاهرة ، اليىم الجوعت ، حالت الطىاريء اثر

إبعاد دخاى ف طائرة حابعت لشركت هصر للطيراى قبل دقائق هي

إه أثاء ححرك الرحلت ) وقالج هصادر هالحيت بالوطار . إقالعها

الوخجهت إل أهسخردام ، فىجء قائد الطائرة بإبعاد دخاى في غرفت

القيادة وعل الفىر هرعج سياراث الوطافء إل هىقع الطائرة خىفا هي

بعد ايقاف هحركاث الطائرة وه " وأضافج الوصادر ( . حدود حريق

.... راكبا 60حن إسال ركابها البالغ عددهن 737هي طراز بىيج

www.libyaakhbar.com

اىخغىط اىسؼىدخ رشغو سدالد جبششح ث جذح واىؼال 26 فجشاش

اىجبسي

فجشاش 26رجذأ اىخغىط اىسؼىدخ اػزجبسا " ... اىسيخ"اىشبض

رشغو سدالرهب اىجبششح ث جذح واىؼال ف إعبس خغزهب 2015

االسزشارجخ ىخذخ دشمخ اىسفش اىزبخ ث خزيف بعق اىينخ

.ثبإلضبفخ إى رشجغ ودػ اىسبدخ اىذاخيخ

أوضخ رىل سبػذ ذش ػب اىخغىط اىسؼىدخ اىزفز ىيؼالقبد

اىؼبخ اىسذ ػجذاهلل األجهش ششا إى أ اىزشغو ػي هزا اىقغبع

سز ثىاقغ سديز أسجىػب

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ANA HOLDINGS Announces New CEO and

Chairman

ANA HOLDINGS )hereafter “ANA HD”( today announces

changes to its board. Shinya Katanozaka, Senior Executive

Vice President, will succeed Shinichiro Ito as President and

CEO from 1 Aprilwhile Mr. Ito will take over from Yoji Ohashi

as Chairman of ANA HD on the same date.

Mr. Katanozaka joined ANA in 1979, after graduating from

Tokyo University‟s Faculty of Law. He has held a wide range

of senior positions within the group, and was one of the key

architects of ANA‟s new holding company structure put in

place two years ago. He is aged 59.

In his 36 years at ANA, Mr. Katanozaka has led a number of

the company‟s major divisions, including corporate

planning, marketing & sales, products & services strategy,

Customer Satisfaction promotion and personnel.

Mr. Ito was appointed President and CEO of ANA in April

2009 and became President and CEO of ANA HD in 2013.

During his leadership of the group, ANA has become Japan‟s

biggest airline by passenger numbers and revenues and has

embarked on a major expansion of its international network.

Mr. Ohashi, who became Chairman of ANA in April 2005 after

previously serving as the company‟s President and CEO, will

continue to act as a Corporate Counselor of ANA HD.

Mr. Katanozaka joined the board of ANA in 2009 when he

was named Senior Vice President,Marketing & Executive

Vice President of ANA HD

http://www.atn.aero

(Continue)

Sales, Customer SatisfactionPromotion, Products &

Services Strategy. Under his leadership, ANA

introduced the „Inspiration of JAPAN‟ brand and its

fully-flat seat in Business Class. The achievement

led ANA to be awarded Japan‟s first „5-Star airline‟

by SKYTRAX in 2013.

Prior to taking up this position, Mr. Katanozaka was

Senior Vice President for Personnel, during which

time he contributed to the strengthening of training

and human resource development in the group. In

April 2012, he was appointed as Senior Executive

Vice President, Corporate Planning. He played an

important role in executing the strategic transition

to a new holding company structure. In April 2013,

ANA Group moved to a holding company structure

and Mr. Katanozaka was appointed Senior

http://www.atn.aero

JFK airport baggage handlers strike despite

sacking threat

Contract workers at New York‟s John F Kennedy airport

took strike action on Thursday morning despite a recent

letter sent by their employer warning of possible

consequences including termination.

British Airways and United Airlines passengers arriving at

JFK were greeted by a picket line of striking baggage

handlers. Some people snapped photos and videos as

they passed.

The workers who were on strike are employed by Aviation

Safeguards, part of Command Security – a company that

provides baggage handlers and security guards to

various airlines at New York City‟s airports. About 100 of

those workers handle baggage for British Airways and

United Airlines at JFK.

The reason for Thursday‟s strike was the lack of union

representation, low wages and a hostile working

environment, say the workers. The strike also served to

prove a point, as Aviation Safeguards recently sent a

letter to its employees informing them of potential

consequences, including termination, for striking and

speaking out.

Holding signs that read “Stop Illegal Threats”, the

workers marched in circles and chanted: “Airport

workers under attack, what do we do? Stand up, fight

back.”

http://www.theguardian.com

(continue)“There have been no threats. There has been none of

that,” Craig P Coy, the CEO of Command Security, told

the Guardian. The letter was only intended to inform the

workers of what can happen to employees who strike,

under the Railway Labor Act, if the company chose to act,

he said. “We want to make sure the employees are aware

and not surprised by what the law is,” he said.

According to the strike‟s organizers, only about three of

the 27 Aviation Safeguards employees scheduled to work

on Thursday morning went to work. The majority of the 24

employees went on the strike – the remaining handful

opted to call in sick.

Aviation Safeguards challenged those numbers.

“I am not there but what I was told is that we had a few

people went out this morning but they are back to work

and most of the people out there do not work for us,” Coy

said a little after noon.

At that time about 50 people – some wearing Aviation

Safeguards winter coats – were still marching in circles

outside Terminal 7.

I am not saying there aren‟t any employees out there. I am

just saying that my experience has been that most of

them are not,” Coy said.

By late afternoon some of the protesters were spotted by

the Guardian wearing bright yellow vests on top of their

coats and working.

http://www.theguardian.com

(continue)While capturing the attention of arriving passengers, the

strike didn‟t seem to disrupt the airlines‟ services.

“Our flights are operating as normal. Aviation Safeguards

has assured us there will be no disruption to our

customers‟ service,” a British Airways spokesperson told

the Guardian.

„We should be paid a lot better‟

Pedro Gamboa Bermudez, 58, joined the picket line at

6am. Instead of working his seven hour shift from 4am to

11am, he marched outside demanding better working

conditions. Bermudez has been working for Aviation

Safeguards for four and half years as a baggage handler.

Most often he works for British Airways loading bags on

the conveyor belt so that they can be X-rayed by the TSA.

When he started working for Aviation Safeguards,

Bermudez was making $8 an hour. Thanks to a recent

ruling by Port Authority, he and about 12,000 other

contractors‟ employees now make $10.10 an hour. The

increase was a victory but not enough, protesters said.

Advertisement

The workers need a living wage to make ends meet in

New York, said state senator James Sanders Jr, who

came out to provide his support to the strike.

“We really don‟t have a target price but we do know

because of the value of our work that we should be paid a

lot better for what we do,” said Bermudez. “We know that

the airlines, not only do they make millions, they make

http://www.theguardian.com

(continue)billions, billions of dollars. We don‟t get to see nothing.”

International Airlines Group, owner of British Airways, is

aiming for operating profit of €1.8bn – equivalent to

£1.41bn and US$2bn – in 2015, according to Reuters.

The protest is just the latest in a series organized by 32BJ

SEIU union, which hopes to represent the contractors‟

employees in the near future.

“Welcome again to John F Kennedy airport, the largest

sweatshop in NYC, where people work in poverty wages,

multiple jobs, don‟t have healthcare, have their rights

violated,” said Rob Hill, vice president of 32BJ. “What

this strike today is about, we got to teach a bully a

lesson. That bully is Aviation Safeguards, who hasn‟t

gotten a message that airport workers have woken up …

The airport workers aren‟t going to work without dignity

anymore.”

'We wear red, they wear blue': Delta contractors barely

braving the cold

Read more

The union‟s involvement in these strikes is a cause of

frustration to Aviation Safeguards.

In May 2014, 3,800 contractors‟ employees voted to be

represented by 32BJ, according to the Associated Press

and the Wall Street Journal. The union says that Aviation

Safeguards employees were part of the vote. Bermudez

remembers participating in the vote and so does Gian

Lopez, who is employed by Aviation Safeguards as

baggage handler for Delta.

http://www.theguardian.com

(continue)Coy insists that no vote by Aviation Safeguards

employees took place.

“There is no recognition of this union. They don‟t

represent the employees. If employees want to vote for

them, they should vote for them and follow the process.

We support the employees,” said Coy, pointing out that

the company provided healthcare, benefits and supported

the recent increase to $10.10.

Bermudez, striking for the first time, said the company

healthcare was too expensive. “I didn‟t enrol for the one

they offered me because if I enrol, I am not making

enough to pay for it and I would not have anything to

support myself,” he explained.

The John F Kennedy baggage workers employed by

Aviation Safeguards were joined by other employees

including security guards and baggage handlers from

LaGuardia, who came on their day off or after their shift.

Among them was Lopez. As he walked over, Lopez was

wearing a bright red and blue NY Giants hat and a brand

new Aviation Safeguards coat.

Lopez received the new coat from his supervisor after the

Guardian reported that his uniform was not weather-

appropriate.

“It‟s warmer,” Lopez said of the coat, smiling.

.

http://www.theguardian.com

Aviation and oil prices: potentially a negative for

airport capital expenditure. Time for PPPs?Coy insists that no vote by Aviation Safeguards

employees took place.

The price of a barrel of Brent Crude, the most popular

method of tracking oil prices, is today around USD56 a

barrel - and this follows a (brief?) rally. A year ago it was

trading above USD100.

The falling oil price has already prompted the likes of BP,

Shell, Chevron, ConocoPhillips, Russia‟s Gazprom and

China‟s Cnooc to announce cuts in investment. It is

occasioned, in the main, by steadily rising supply from

non-OPEC countries, and especially from the US, and is,

in theory at least, good news for air travellers, if and

when airlines feel able to pass on any savings to their

customers (assuming they are able to, they may be

hedged at higher rates). Some airlines in Southeast Asia

and China have already reduced their fuel price

surcharge, at least.

But the other side of the industry coin is that some

countries may feel the squeeze on their big ticket airport

construction projects. Already, they are looking to trim

them back. At the very least, smaller construction

projects could be postponed or abandoned in many

countries, either because the revenues to support them

have been reduced or because of declining investment in

neighbouring oil facilities and consequential effects on

passenger traffic flows, as employees are laid off and

executive travel cut back.

http://centreforaviation.com

(continue)This could be the moment when the PPP, already gaining

in popularity as a method of ensuring critical airport

infrastructure is secured, makes a quantum leap - but the

private sector must have confidence in its counterparts in

the public arena.

Rising supply is the main cause of the oil price drop

The scale of the price reduction can be instantly ascertained

from the chart below, which is accurate to 02-Feb-2015.

Oil prices (USD/barrel) – most recent quarter: 02-Nov-

2014 to 02-Feb-2015

The biggest cause of the falling price is rising supply

from non-OPEC countries, particularly from the US and

Canada, and partly as an offshoot of burgeoning shale oil

and gas industries there. The International Energy

Agency (IEA) believes that US supply alone will raise total

non-OPEC production by a record 1.9 million barrels per

day in 2015. (OPEC is responsible for about 40% of the

world‟s oil supplies(.

http://centreforaviation.com

(continue)There is no guarantee that oil prices will remain in this zone

and the small but significant increase in the last week is

noted. Indeed, according to OPEC's Secretary-General

Abdulla al-Badri we have already hit bottom. Not only that; he

sees a real possibility that oil prices could dramatically

explode to upwards of USD200 per barrel in the future (a

figure that aviation analysts worried about incessantly during

2008/9 because at that level operating just about any airline is

unsustainable).

The Secretary General is not party to the belief that his

organisation will ride in and rescue the oil market by reversing

its previous commitment to holding steady on production.

Rather, he takes the view that the oil market is ‘self-correcting’

as oil companies have made deep cuts to their spending,

which will eventually lead on to lower production growth.

Furthermore, the oil rig count in the US is plunging, which is

regarded by some as an indicator of a bottoming in oil prices.

Then again, Citi's leading commodity research analyst

suggests that the price could go as low as "the USD20 range

for a while", reducing Citi's forecast for 2015 of an average

price of USD54, down from its previous USD63 forecast.

The simple fact: nobody knows. Not even OPEC.

The long term impact of short term low priced oil will be

today's under investment

http://centreforaviation.com

(continue)However, in the midst of all the cutting back as the industry works

through the current oversupply Secretary-General al-Badri also warns

that the industry is putting future oil supplies at risk by under-investing

today. The same may be true for airport investment.

Some oil industry analysts take the view that OPEC is a participant in

a game and that an equally likely outcome is that under-investment

has the potential at least to cause oil prices to rocket higher if demand

grows faster than future supplies. In other words, OPEC is happy to

endure short-term pain for the potential of a big long-term gain.

But assuming that, unlikely as it may seem, he is wrong, and that oil

prices continue to land south of USD75 for the foreseeable future. Or

that they continue to rally for a short time only then plunge below

USD50 again.

That will have a serious impact on the ability of many states to

balance their budgets. Treasuries do not respond well to instability,

notably when they are relying on the income from oil to underwrite

their budget.

As the chart below indicates at least 11 states need the oil price to be

above USD75/barrel in order to do so.

Marginal breakeven cost of production by country

http://centreforaviation.com

(continue)All but three of these are in the Middle East, West Asia or North Africa.

Furthermore, as this analysis by Deutsche Bank from Oct-2014

makes clear, that breakeven figure has been rising steadily over the

years.

Fiscal breakeven price (Brent crude USD bbl) 2006-2015f

Deficits are a bigger problem for some countries than others.

Owing to their considerable dollar reserves, the Saudis can

afford to overspend for a while at least, while Russia, too, has a

cushion. But countries like Nigeria that barely have any reserves

are in far greater trouble. Nigeria only has one quarter‟s worth of

assets to play with oil at USD83/barrel.

http://centreforaviation.com

(continue)Many of the high cost oil producers are due to be the

biggest airport investors

Indeed, in another survey undertaken by the BBC in the

UK, only the (non-OPEC) Kazakhstan could sustain oil

production at USD50/barrel, that mainly due to the 2014

shutdown of the Kashagan oil field and the payment of

“subsistence wages” to oil workers.

There are 115 countries producing oil, from 10.5 million

barrels per day (bpd) to just 2,000 in the case of Panama.

The real power, though, resides with the top 30

producers, those that extract more than half a million

barrels each day.

All 12 of the OPEC members are represented, with the

exception of Ecuador, which currently comes in at

number 31 on the list.

http://centreforaviation.com

(continue)The world‟s top 30 oil producing nations, over 500,000

barrels/day, including OPEC members

http://centreforaviation.com

(continue)Coincidentally, many of the countries are also the location of some of

the world’s largest airport construction projects, as shown in the

following table.

The world‟s largest airport projects in oil producing countries

http://centreforaviation.com

(continue)

This report deals mainly (but not exclusively) with those

countries where the state has overall responsibility for

airport construction and associated investment and where

oil revenues are a significant part of its income.

Non-oil dependent states could also experience turmoil in

their infrastructure - for example as the result of exposure of

neighbouring oil producing states to the situation that exists

momentarily, the Gulf being a good example.

There is a possibility that non-oil dependent states could

thrive as investment funds are redirected their way but there

are always other factors involved and such a possibility

requires further research and a separate report.

http://centreforaviation.com

(continue)The Middle East is the most likely region to suffer investment

setbacks

Diversified industries help protect UAE airport investments

Two of the largest airport construction projects anywhere are at

the existing Dubai International and under-construction Dubai

World Central airports in the United Arab Emirates (UAE),

totalling in excess of USD44 billion and with completion dates

varying from Q42015 to 2027 in the case of DWC. Dubai is

expected to become the world‟s largest hub for air transport by

around 2020, once DWC (aka Al Maktoum) comes fully on

stream. Dubai International overtook London Heathrow to the

title of world‟s busiest international airport in 2014 and is the

sixth busiest overall with 70.3 million passengers (+6.1%) in that

year.

The UAE‟s airports also include Abu Dhabi, an emirate that is

more oil dependent than is Dubai, but where economic

diversification has encouraged the country‟s non-oil and gas

GDP to outstrip that attributable to the energy sector to an extent

that non-oil and gas GDP now constitutes 64% of the UAE‟s total

GDP.

Those airports are state-funded but do not appear to be at risk

yet, partly because of the diversification of revenue earning

activities in Abu Dhabi and the fact that only around 7% of the

Dubai emirate's revenues now emanate from oil and natural gas.

In any case those reserves are expected to run out in 20 years or

so and Dubai has therefore carved an economic future for itself

that is more related to trade, entrepôt activities, financial

services and tourism; all of which require investment in the final

part of the Dubai economic jigsaw, construction.

http://centreforaviation.com

(continue)Overall, the UAE is not considered to be at risk in this respect

just yet at least. But the effect of the oil price drop has been

more in evidence elsewhere in the region and notably in Kuwait

and Oman.

Kuwait's airport project could be broken into three parts, with

private investment possible

Like the UAE, Kuwait has amassed considerable foreign

currency reserves, which means that they could run deficits for

several years if necessary. But low oil prices does focus the

mind and influence decisons on government expentiure.

Kuwait is apparently already considering breaking up the USD4.8

billion Kuwait International Airport expansion project into three

parts and in Jan-2015 formed a committee to do just that.

Options include adding new terms for current major contractor

Kharafi National Engineering and Procurement, breaking the

work up into separate private contracts, using government

engineering resources for certain infrastructure elements or

excluding certain elements of infrastructure development to

reduce costs. The development plan as it exists before any

cutbacks will increase capacity to 25 million passengers per

annum by 2025 (from 13 million) and is expected to be completed

by 2020. The Kuwaitis are inherently nervous about this sort of

infrastructure; previous plans have been cancelled on several

occasions.

On 08-Feb-2015 fears were realised when the Ministry of Public

Works tender committee recommended rejecting all bids for the

development of new terminal and infrastructure modernisation at

the airport. A joint venture between Kharafi National and Turkey‟s

Limak Holding had submitted the lowest bid, of KWD1.4 billion

(USD4.8 billion) but it was reported to be 39% above projected

programme costs and failed to meet technical specifications.

http://centreforaviation.com

(continue)Kuwait is considered to be a Middle East leader in diversifying

earnings away from oil exports but that has proved to be difficult

since the first Gulf War in 1990-91(which in itself had an adverse

upward effect on oil prices and, thereby, aviation). Hence

petroleum still accounts for nearly half of GDP and 94% of export

revenues and government income.

Oman may also be looking at trimming some of its airport

projects

it has been working hard to improve its tourism product, which is

based on culture, history and nature

Having already reduced the parameters for regional airports,

which led to a trimmer Cap Ex already, in 2011, Oman may have

other options in mind. Situated on the south eastern coast of the

Arabian Peninsula, facing the Indian Ocean, Oman has modest

oil reserves, ranking at #25 in the global table and it holds a

similar rank for natural gas reserves. A relative regional

backwater until the last twenty years or so, Oman was awarded

the title of the most improved nation in the world in terms of

development during the preceding 40 years by the United

Nations Development Programme in 2010 and it has been

working hard to improve its tourism product, which is based on

culture, history and nature rather than the hedonistic pursuits

associated with some parts of the UAE.

That product, which is expected soon to be one of the country‟s

biggest foreign currency earners, requires airport investment,

which is being undertaken by the government, a privatisation

procedure involving what was then the BAA and the now defunct

ABB Equity Ventures having been abandoned in 2004, three

years after it began.

http://centreforaviation.com

(continue)There are five projects under way in Oman; the main two are at

Muscat, the capital, and Salalah. Overall, OMR3 billion (USD7.8

billion) is due to be invested in the Muscat airport over a 10-year

period and it is one of the largest projects to ever be undertaken

in Oman's history. The Salalah airport is expected to be fully

operational before the end of 2015.

Disruption to the oil supply took place between 2000 and 2007,

prompting a fall in production of over 25% though it has since

recovered. Clearly, despite the diversification into mass tourism

and other industries oil remains very important to the economy –

it continues to account for 46% of GDP - and to the transport

construction needed to sustain new industries such as tourism.

The Public Authority for Civil Aviation and Ministry of Transport

& Communication are exploring how to diversify participants in

the aviation sector and look at self sustaining concepts including

PPPs and other mechanisms to attract private participation in

aviation at all levels and particularly in developing commercial

sources of revenues. That process has most definitely

accelerated since the oil price dropped below USD 100 per barrel

and is supported by successful privatisations in the utilities

sector.

Saudi Arabia has deep pockets and can withstand lower prices

Another Middle East country where the falling oil price might

eventually have an adverse effect is Saudi Arabia.

The world has been anticipating that Saudi Arabia, the world's

largest oil exporter and OPEC's most influential member, would

support global oil prices by cutting back its own production, but

there is little sign it wants to do this. The reasons are thought to

be so that it might instil some „discipline‟ among fellow OPEC oil

producers, and perhaps to put the US's burgeoning shale oil and

gas industry under pressure.

http://centreforaviation.com

(continue)Saudi Arabia is thought to need oil prices to be at the very least

USD85 in the longer term, it has deep pockets with a reserve

fund of some USD700 billion, so it can withstand lower prices for

some time. If a period of lower prices were to force some higher

cost producers to shut down, then the country might hope to

pick up more market share in the longer run. But there is also

some recent history behind the unwillingness to cut production.

In the 1980s, the country did cut production significantly in a bid

to boost prices, but it had little effect and it also badly affected

the Saudi economy.

The amount of investment in Saudi planned and existing airport

projects currently totals around USD10 billion, which includes

the soon to be completed USD7.2 billion King Abdulaziz

International Airport currently being constructed 19km north of

Jeddah, and the expansion of terminals 3 and 4 at Riyadh King

Khaled International Airport. The projects are part of a broader

master plan to upgrade 37 airports in the country by 2020 and

the goal of becoming a major aviation gateway for both domestic

and international demand. New airports in Jazan, Abha and Arar

will be completed in 2015, under the General Authority of Civil

Aviation‟s )GACA) efforts to improve infrastructure for domestic

air travel.

Some of the other OPEC members in the region, such as Iran

and Iraq, with greater domestic budgetary demands because of

their large population sizes in relation to their oil revenues, have

less room for manoeuvre than others. Indeed, as the above chart

demonstrates, Iran needs the oil price to be around USD130 as a

minimum in order to balance its budget.

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(continue)Lower prices are bad timing for both Iran and Iraq

Iran has enjoyed some easing of sanctions

There has been some easing of sanctions in connection with

international concern over its nuclear policy and the government

must be anxious lest it allows the opportunity to improve both its

airline fleets and airport infrastructure to slip away. rThe only

really major airport project we are aware of currently is the one

to build a new terminal (and possibly another runway) at

Tehran‟s Imam Khomeini International Airport, although there are

plans for new airports at Ahwaz (ironically linked to the

discovery of a new oil field there( and Mash‟had.

In the latter case French and Chinese companies are involved in

the financing and at Tehran Aeroports de Lyon and China SCE

Property Holdings are reported jointly to be attracted to the

chance to bid to operate the Imam Khomeini airport.

Iraq is still in rebuilding mode

Iraq is trying to rebuild in a continuously fractious „post-war‟

environment in which religious and ethnic tensions predominate,

within the framework of the loss of some parts of the country to

the rebel organisation ISIS/ISIL, which has made the problem

worse by capturing oil wells and undercutting market prices by

selling at a significant discount - around USD30-60 a barrel. It is

estimated it is making about USD3 million a day through black

market sales, the proceeds of which are almost certainly not

going to be directed towards constructing new airports.

As long ago as May-2010, plans were unveiled for an expansion

of Baghdad International Airport, to double its capacity to 15

million passengers per year. The expansion, on this occasion to

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(continue)be funded by foreign investors, will include the construction of

three new terminals and the refurbishment of the existing three

terminals, which will each accommodate 2.5 million passengers

annually. General upgrade work began in May-2013 and so far

Terminal C has been refurbished. Together with the cost of the

terminals the total investment is USD2 billion.

Iraq's Government stated it intends to invest USD50 billion to

improve airport infrastructure

More recently, in May-2014, Iraq's Government stated it intends

to invest USD50 billion to improve airport infrastructure over an

unspecified period, including new terminal buildings, air traffic

control systems, safety and security measures, IT systems,

maintenance and operational facilities. New airports are also

under construction near Duhok and Karbala. Under the

circumstances it is going to be difficult for the government to

attract foreign investors so the availability and price of oil have

even greater significance here.

Falling prices are a double edged sword for Egypt

The fall in the oil price is regarded as a double edged sword in

Egypt, where it will cut Egypt's fuel subsidy bill by USD4.2 billion

but it could also hit the finances of oil-exporting Gulf allies who

have given Egypt billions of dollars in aid.

Gulf oil exporters have thrown their weight behind Abdel Fattah

al-Sisi, who orchestrated the overthrow of elected Islamist

president Mohamed Mursi in Jul-2013. Saudi Arabia and the UAE

consider Egypt a strategic ally in the fight against the Muslim

Brotherhood, which they see as a threat to their own ruling

orders.

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(continue)However, the sums provided to Egypt so far are relatively small

when compared with the Gulf's savings, so it is likely things

would probably have to get a lot worse before they cut aid.

he country will need extended largesse to continue unless it can

attract the private sector

Egypt has never more than partially embraced the privatisation

of its airports although there are or have been management

contracts at Marsa Alam, Alexandria and Cairo. Egypt has been

and is the recipient of loans from the World Bank (a Cairo

terminal) and Japan (Alexandria Borg el Arab airport) and the

country will need extended largesse to continue unless it can

attract the private sector, both domestic and international, to

projects which include an increase in overall airport capacity

from 30 million now to 60 million by 2050, an overhaul of the air

navigation system and the USD10.5 billion five-stage, 20-25 year

airport city project at Cairo.

That project is expected to generate direct employment for up to

30,000 workers and indirect employment for another 90,000.

(Note the estimated cost of that enterprise continues to fall, from

USD18 billion to USD15 billion to today‟s estimate of USD10.5

billion).

Russia is in urgent need of private sector support for airport

development

Moving away from the Middle East and North Africa it almost

goes without saying that the tumbling oil price has had a

dramatic effect on the fortunes of one of the world‟s largest oil

producers, Russia.

Rosneft, the partly state-owned oil giant, has already been bailed

out with cheap central bank cash to prevent it defaulting on its

debts.

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(continue)Russia loses USD2 billion in revenues for every dollar fall in the

oil price

Falling oil prices, coupled with western sanctions over Russia‟s

support for separatists in eastern Ukraine have hit the country

hard. Its economy depends on energy revenues; oil and gas

account for 70% of Russia's export incomes. Russia hiked its

interest rate dramatically to 17% in order to support the rouble,

demonstrating how heavily its economy depends on energy

revenues, with oil and gas accounting for 70% of export

incomes. Russia loses USD2 billion in revenues for every dollar

fall in the oil price, and the World Bank has warned that the

country‟s economy would shrink by at least 0.7% in 2015 if oil

prices do not recover. But, as with Saudi Arabia, Russia looks

unlikely to cut production to shore up prices.

he government has cut its growth forecast for 2015, predicting,

too, that the economy will sink into recession.

There has been a distinct trend towards private sector

participation in Russian airport development over a number of

years (see the related report:

http://centreforaviation.com/analysis/global-airport-finance-and-

privatisation-capa-review-2014-the-big-funds-dominate-

transactions-202694).

Even so, there are many projects around the country that require

a considerable input of public sector funds merely to renovate

runways and other infrastructure including areas such as Crimea

that have recently come under Russian control.

the cabinet calculated that close to USD10 billion would be

needed to improve infrastructure in and around the Moscow Air

Hub alone

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(continue)18 months ago the cabinet calculated that close to USD10 billion

would be needed to improve infrastructure in and around the

Moscow Air Hub alone; the funding to be found in the federal,

Moscow and Moscow region transportation budgets. Some of

this may come from the private sector as Sheremetyevo and

Vnukovo airports are to be merged and privatised but there is

still a huge public sector requirement to be catered for by

dwindling financial resources.

Kazakhstan has a much lower production price

Once a Soviet republic, Kazakhstan is one of the few countries

able to balance its budget with such a low oil price as mentioned

earlier.

There are numerous large scale airport projects in place and the

government investing approximately KZT99 billion (EUR473

million) between 2015 and 2017, involving reconstruction of

runways and passenger terminals, the modernisation of

Kyzylorda and Shymkent airports, as well as a new passenger

terminal building at Astana International Airport.

n Africa, Nigeria is a standout problem case

Energy sales account for 80% of Nigeria‟s revenue - and airport

privatisation process has stalled

In Africa, the biggest potential casualty by far is Nigeria. As with

Iraq and Iran, Nigeria has greater domestic budgetary demands

because of a large population size (at 151 million, it is the most

populous country in Africa, accounting for 18% of the continent's

inhabitants) in relation to oil revenues.

Nigeria is Africa's biggest oil producer and ranks at #13 on the

global production list. It has achieved growth in the rest of its

economy but despite this it remains heavily oil-dependent.

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(continue)Energy sales account for up to 80% of all government revenue

and more than 90% of the country‟s exports.

Against this background Nigeria has been attempting to privatise

its airports for many years, with some small successes such as

Lagos International Airport‟s T2, which has been operated under

a PPP for several years now. Privatisation is consistently called

for, including by FAAN, the Federal Airports Authority, but the

process is painfully slow in a country strangled by excessive

bureaucracy and other drawbacks. In 2014 the government

publicly rejected plans to privatise FAAN because of security

reasons, citing the way in which the US government and its

agencies had taken a stronger hold on their airports since „9/11.‟

There remains an underlying desire to privatise airports on a 15

to 20-year concession scheme but the political will is weak.

Meanwhile, there is some USD1.7 billion of investment into

airports including Lagos, Abuja (the capital) and Port Harcourt,

mainly on new terminals.

In Asia, Malaysia is a major regional centre for oil and gas

Southeast Asia has only two countries in the top 30 oil

producing nations – Indonesia (23) and Malaysia (29).

Despite Malaysia‟s fairly low ranking globally, its oil reserves are

the fourth highest in Asia Pacific after China, India, and Vietnam.

669 million barrels were produced in 2014, a reduction of 4%

over the previous year. The country is strong in the production of

liquefied natural gas, being the world‟s second largest exporter

and production has risen over the past two decades to serve the

growing domestic demand and export contracts. Nearly all of

Malaysia‟s oil comes from offshore fields. Declines in production

at Malaysia‟s major producing oil fields in the past decade have

led government efforts to encourage investment in enhanced oil

recovery and development of smaller and marginal fields, as well

as deepwater fields.

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(continue)The oil and gas industry is very significant here. As a result of

rising regional and domestic demand for crude oil and oil

products, Malaysia plans to become a regional oil trading and

storage hub by increasing the country‟s refining and storage

capacity.

Most of Malaysia‟s main airports have a degree of protection

from the machinations of the oil industry where investment is

concerned, as they are privatised by way of a stock market

flotation over 15 years ago, the first in Asia. But any loss of oil

revenues must impact on investor sentiment in general.

For the moment most of the investment dollar is going into Kuala

Lumpur International Airport (KLIA) where KLIA2, the new

„budget‟ terminal, opened in May-2014 at a price well over budget

of USD1.3 billion. It has since been subject to scrutiny on the

grounds of safety concerning ground stability issues.

Nearby Brunei is more dependent on oil

The tiny state of less than half a million people is the 48th largest

producer globally making it the fifth ranked in the world by gross

domestic product per capita at purchasing power parity and the

fifth-richest nation out of 182, based on its petroleum and natural

gas fields, according to Forbes. The IMF has estimated that

Brunei is one of two countries (the other being Libya) with a

public debt at 0% of the national GDP.

With that level of prosperity a fall in the oil price over even a

protracted period should not impose too greatly on the delivery

of transport infrastructure but in any event Brunei has already

completed the necessary development for the foreseeable future

with the transformation of what it calls „a landmark airport

terminal‟ and the doubling of capacity from 1.5 million to three

million ppa.

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(continue)The modernisation projects, which included new roads, cost

BND130 million (Brunei dollars) or USD95.7 million and were

completed in Nov-2014. Just in time, perhaps.

The US – Now a major oil producer, but with collapsing

infrastructure

One of the key determinants of the oil price momentarily of

course is the United States, the world‟s third largest producer,

owing to the extra supplies emanating from new sources in

different parts of the country, and especially in North Dakota. The

growth of oil production in North America, and particularly in the

US, has been staggering. US production levels are at their

highest in almost 30 years. This growth in America‟s energy

production, where gas and oil is being extracted from shale

formations using hydraulic fracturing or „fracking,‟ has been one

of the main drivers of lower oil prices, essentially severing the

linkage between geopolitical turmoil in the Middle East, and oil

price and equities.

This additional supply could, of course, end up undermining

itself. A point must be reached when the consistently tumbling

price ensures that production is no longer viable here, either. On

the other hand though, even though many US shale oil

producers have far higher costs than conventional rivals, many

need to carry on pumping to generate at least some revenue

stream to pay off debts and other costs - a sort of Catch-22.

The reasons why airport privatisation has failed to gain any sort

of substantial ground in the US has been well documented many

times previously. (For a brief synopsis see the related report:

http://centreforaviation.com

(continue)http:// centreforaviation.com/analysis/global-airport-finance-and-

privatisation-capa-review-2014-the-big-funds-dominate-

transactions-202694).

But in the meantime, US airports need to complete at least

USD71.3 billion worth of essential infrastructure projects before

2017 and the value of the projects we know of is in the same

order though much of this is accounted for by multi-year „master

plan‟ led developments at the largest hubs )Chicago, Los

Angeles and New York alone account for some over USD15

billion).

The nation is accused by some of its representative

organisations of falling progressively behind due to the lack of

funds being invested into developing gateways. They also allege

the US‟ global competitiveness and economic/job growth are

imperilled by collapsing transportation infrastructure.

Essential funding for runways (repairs and new where required)

usually comes from the FAA, but for other parts of the airport it

must be found from local (municipal/county) resources, from

bond issues and sometimes from the airlines where they manage

terminals.

As things stand it is difficult to envisage a further worsening of

infrastructure renewal activity as a direct result of the falling oil

price, even if the US is a primary cause of it. America‟s

commercial income is enormously diversified after all. Indeed,

that downward price variation is a major determinant of the

improved fortunes of the country‟s airlines )American for

example projects a USD5 billion saving in 2015), indirectly giving

a boost to the airports.

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(continue)Canada‟s east may benefit from the oil price but the west - and

its airports - won‟t

A similar situation exists in Canada, the world‟s fifth largest

producer. Oil extraction and refining is, with logging, one of

Canada‟s main industries and responsible for about 8% of GDP.

Canada‟s oilfields are mainly in Alberta, including the five major

but not yet fully exploited oil sands reserves, where production

is estimated by analysts to be profitable at a price of USD30 to

USD40 per barrel. Reserves are also found in Saskatchewan and

Newfoundland to a lesser degree. The enhanced production

there has, together with that in the US, been one of the biggest

factors in the falling price globally. A „similar situation‟ also

because most of the airports are still mainly within the public

sector even if they are no longer administered by Transport

Canada, courtesy of not-for-profit stakeholder managed entities.

We are aware of approximately USD8 billion worth of airport

construction projects across the country, of which US1.7 billion

is allocated to a new runway and terminal expansion at Calgary

Airport in Alberta; the city now also becoming one of Canada‟s

leading finance centres, possibly soon to rival Toronto.

Canada‟s economy will probably weaken in 2015 as the slump in

oil prices cuts exports and investment

As with the US, Canada has a much diversified industrial base,

but crude oil remains the country‟s largest export and a report by

Bloomberg in late Dec-2014 predicted that Canada‟s economy

will probably weaken in 2015 as the slump in oil prices cuts

exports and investment. GDP growth is expected to fall to below

2% in 1H2015. A reduction in drilling has already led to a decline

in support services for mining, oil and gas companies in Alberta

and Saskatchewan.

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(continue)In infrastructure terms, including airports, the effects are most

likely to be felt in the west and central areas, while the eastern

part of the country and particularly Ontario and Quebec should

experience a beneficial impact from the falling oil price.

Latin American oil producing nations will soon feel the squeeze

In Central and Latin America, Brazil, Venezuela and Mexico are,

respectively, the 12th, 9th, and 10th biggest oil producers globally.

Brazil is a major oil consumer, but also a net exporter

According to the Brazilian state-owned Petrobras, the oil and

natural gas sector‟s contribution to Brazilian GDP increased

from 3% in 2000 to 13% in 2014.

Brazil is also the tenth largest consumer of oil products but is a

net exporter of oil since 2011. Extraction and distribution is

shared amongst 50 companies but Petrobras, previously the

monopoly organisation, is the only global oil producer, with

output of more than two million barrels of oil equivalent per day.

In addition to the reserves being worked now the offshore Tupi

oil field, discovered by Petrobras in 2007, is believed to hold

between five and eight billion barrels of recoverable light oil and

neighbouring fields may even contain more, which all in all could

result in Brazil becoming one of the largest producers of oil in

the world.

This is important because another factor in the mix is that Brazil

still imports some light oil from the Middle East, because several

refineries, built in the 1960s and 1970s, are not suited to process

the heavy oil in Brazilian reserves, discovered decades later. (A

similar scenario exists in Britain –see below - with regard to the

oil quality).

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(continue)Brazil has the world's second largest known oil shale resources

On top of all that, Brazil has the world's second largest known oil

shale resources (the Irati shale and lacustrine deposits) and has

second largest shale oil production after Estonia.

Taking all this evidence into account Brazil would be prone to an

immediate adverse effect from the oil price drop were it not for

the fact that it is only a minor exporter of crude because of

internal consumption. As a result, the effect of the falling oil

price on Brazil so far is mixed.

But the longer term consensus appears to be that the oil-price

bonanza is over for Latin America generally, and that its oil-

producing nations will soon feel the squeeze. Political stability in

the region, heavily dependent on the export of commodities, will

also suffer from these price swings.

How would that impact on Brazilian airport construction? While

some responsibility has been removed from state operator

Infraero in the case of the partially privatised airports in Sao

Paulo, Rio de Janeiro, Brasilia, Belo Horizonte and Natal, that

organisation is still responsible for driving forward construction

activities and meeting deadlines as majority shareholder.

Furthermore, Brazil has a massive regional airport expansion

programme in place covering the construction or refurbishment

of 270 airports nationwide and little of that will attract private

financing. In Dec-2014, the Brazilian Development Bank (BNDES)

projected a 49.5% increase in airport investments between 2015

and 2018 compared with the preceding three-year period, to

BRL16 billion (USD6.2 billion).

With talk of mass protests again over the construction of 2016

Olympic Games facilities while health and education investment

suffers, something has to give and the airport programme must

be in the frame.

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(continue)The position is worse in Venezuela

Venezuela has plans for c. USD700 million of airport investment

presently. Venezuela has a similar multi-regional airport

modernisation scheme to that of Brazil, albeit on a much smaller

scale, and provided for mainly by the public sector. In Venezuela

„privatisation‟ in the airport sector at least has usually meant

transferring control from central government to local states,

although a 20-year operation and expansion contract was put

into place at Margarita International Airport in 2004, involving

Flughafen Zurich and a local associate. However, it was quickly

declared void.

Venezuela‟s economy was severely affected by the economic

crisis. The country failed to diversify its oil-dependent economy

(40% of its fiscal receipts and 90% of foreign exchange) and

thanks to economic mismanagement it was already finding it

difficult to pay its way even before the oil price started falling.

Inflation is running at about 60% and the economy is teetering on

the brink of recession.

The need for spending cuts is clear, but the government faces

difficult choices. Removing the subsidies on petrol prices that

cost the government USD12.5 billion a year is not on the agenda.

A petrol price rise in 1989 saw widespread riots that left

hundreds dead.

Venezuela has a public debt of around 50% of GDP and a budget

deficit of 16%, which puts it in a very vulnerable position. Again,

airport investment would seem to be a candidate for the chop.

ew Mexico City airport safe(ish) but surface transport links could

be at risk

Finally, Mexico, where the largest airport project in the region,

and one of the largest in the world, is almost under way at

Mexico City following years of vacillation.

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(continue)There is some concern in Mexico – the world‟s 10th largest oil

producer - about the falling oil price and its impact on

infrastructure. Moreover, although Mexico‟s fiscal situation is

stronger than Venezuela‟s, it is undergoing a wave of protests

and discontent (over, for example, the killing of 43 students and

a scandal involving the president and his first lady) that could

easily develop into widespread turmoil. Although democratic

order itself is not under threat, the government‟s capacity to

bring about reforms and maintain order will be severely impaired

in the coming year.

In the midst of this dissatisfaction the country has been forced to

adjust its budget for 2015 to account for new price assumptions,

although the old price assumption of USD82 per barrel of oil was

considered conservative by regional standards.

government representatives revealed that two surface transport

projects including a rail line have been cancelled because of the

oil price decline

In a webinar on 04-Feb-2015 government representatives

revealed that two surface transport projects including a rail line

have been cancelled because of the oil price decline. At the same

time they saw no reasons – yet – why the new USD9.1 billion

Mexico City airport project should be modified. The airport is to

be financed 58% from public funds and 42% from the private

sector. But it should be noted that – strangely - surface transport

links to and from the airport have not yet been agreed upon as

the airport, 30 km outside the city, comes under a different

jurisdiction. The existing airport is in Mexico City and therefore

governed by the city council, while the new one is in the State of

Mexico‟s jurisdiction.

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(continue)Given the penchant in Mexico to promote bus travel over rail

travel )including the „high speed‟ variety( it would be of little

surprise if surface transport schemes to connect with the new

airport were axed or at least postponed. The airport itself will

surely avoid the axe and even „trimming‟ but private sector firms

(and there are many in Mexico, including the ASUR, GAP and

OMA multi-airport operators, two of which are listed on various

stock exchanges as well as OHL, which is represented at Toluca

Airport near Mexico City) may not be as inclined as they might

have previously been to commit to it.

There are some Latin American countries that will probably

benefit from the oil price drop as they are mostly net importers

by some margin. They include Argentina, Bolivia, Chile and Peru.

They will see their industrial production costs decrease and

disposable consumer income go up. The benefits for Argentina,

however, will be limited, as it is also a relatively large oil

producer and does not import much. And its ambitious plans to

develop the Vaca Muerta shale field are now at risk, as the break-

even price of producing there is above the current oil price.

There is limited airport investment in Argentina (c. USD500

million) and Bolivia (c. USD300 million), but considerably more in

Peru (USD1.7 billion, mainly at Lima‟s Jorge Chavez International

Airport while work will commence on the USD658 million

Chincero Cusco airport concession in 2Q2015.

Investment in Chile is dominated by the USD700 million

management and development contract for the concession of

Santiago de Chile Arturo Merino Benítez International Airport,

which was recently won by the Nuevo Pudahuel consortium

consisting of Aéroports de Paris (45%), VINCI Airports (40%) and

Astaldi (15%).

http://centreforaviation.com

(continue)Airports servicing the North Sea oil fields are most at risk of

reduced investment in Europe

This survey ends with a brief consideration of the effects in

Europe. As the Top 30 Oil Producing Nations table reveals,

Europe is represented by Norway (#15) and the UK #20) although

the remainder of the European Union as a whole is placed at #14

(Norway is not a member of the EU).

The United Kingdom is a substantial oil producer, but is now a

net importer

The UK has a wide and diverse range of businesses but while

some, such as textiles and heavy engineering have declined

enormously, oil production should not be underestimated. Oil

reserves were valued at an estimated GBP250 billion in 2007 and

it is estimated there is still 30-40 years of production left (around

24 billion barrels). But those reserves have been declining so

that while from the late 1970s to the early 2000s the UK was a

major exporter of oil and gas it is now a net importer.

Even so, the oil and gas industries in the UK generate turnover in

excess of GBP35 billion per annum (USD53.6 billion) and the

industry is the country‟s largest industrial investor. 98% of

petroleum is produced from offshore fields, mostly in the North

Sea. Typically, a barrel of North Sea crude oil will yield 3% Liquid

Petroleum Gas, 25% diesel, 20% kerosene (jet fuel/heating oil),

12% fuel oil (heavy residue for power generation) and just 37%

petrol, despite the common belief amongst British drivers that

most of it ends up in motor vehicles.

The most likely effect of the falling oil price will be on those

airports that service these industries. They lie along the East

Coast, from Aberdeen in Scotland down to Norwich in East

http://centreforaviation.com

(continue)Anglia. (The recently closed Manston Airport in Kent might also

have serviced these industries, along with Southend Airport and

the proposed Thames Estuary Airport but they are all south of

where the main action is).

Some of these East Coast airports are already having a hard time

of it, notably Durham Tees Valley, where passenger traffic

declined appreciably again in 2014 from what was already a new

low of 159,500, and which is really only sustainable through a

regular connection with Amsterdam. Also Humberside, which

handles less than 250,000 passengers a year.

It is Aberdeen Airport investment that is likely to be the worst

affected however. Around 90% of the UK's oil and gas production

and reserves are in the geographic waters around Scotland. The

oil and gas sector makes an important contribution to the

Scottish economy and was a big factor in the independence

debate in 2014. In 2012-13, the output from the Scottish

geographic share of the UK oil and gas sector accounted for

GBP18.4 billion, 13% of Scottish GDP.

BP has already said it is to cut capital investment by USD6 billion

(GBP4 billion(, on anticipation of a “new reality” in which the oil

price slump is likely to last for several years, varying from

USD45-USD60 a barrel and certainly much less than USD100 a

barrel. BP is but one of the major oil companies that have

collectively pledged to slash more than USD46 billion from their

planned capital spending budgets.

Aberdeen, which BP promotes as “the energy capital of Europe,”

is the headquarters for its North Sea upstream business,

covering offshore operations, terminals and pipelines in both the

UK and Norway, employing nearly 4,000 people.

BP reported a USD969 million loss for 4Q2014after taking a

USD3.6 billion charge, mostly to reflect the impact of the lower

oil price environment.

http://centreforaviation.com

(continue)Statoil seeks to shield its big new North Sea field, offering

protection to airports on the Norwegian coast

Aberdeen and the two main Norwegian coastal cities of

Stavanger and Bergen are, like it or not, closely connected by the

oil industry. While international companies such as BP are

represented there, the big beast of Norwegian oil production is

Statoil, headquartered in Stavanger. Statoil, present in 36

countries, is the world's eleventh largest oil and gas company

and the twenty-sixth largest company, regardless of industry, by

profit in the world. The company has about 23,000 employees.

The government (state) is the largest shareholder with 67% as

the company‟s name indicates, with the remainder public stock.

It has 60% of the total production on the Norwegian Shelf.

As this report is written Statoil declared it was braced for a long

period of depressed crude prices and set out plans to slash

costs and cut investment. It will cut capital expenditure by a

tenth this year, reducing exploration, spending on its US shale

prospects, and modification of mature fields.

But it is moving ahead with projects already sanctioned and will

soon unveil plans for the Johan Sverdrup oil field, which could

cost about USD30 billion to develop fully. Johan Sverdrup is

located on the Utsira Height in the North Sea, 140 kilometres

west of Stavanger. The Plan for Development and Operation is

expected to be discussed by the Storting (Norwegian Parliament)

during its spring 2015 session. Production start-up is scheduled

for end 2019 and it is a 50-year project.

Reading between the lines Statoil would appear to be more likely

to make cuts outside of its biggest projects around Norway and

this will offer some protection to the considerable investment

http://centreforaviation.com

(continue)being made by the state-owned airport operator Avinor (the

world‟s 9th biggest by revenues – USD1.6 billion in 2013) in the

Bergen and Stavanger airports; also at Oslo, the capital. Bergen

and Stavanger airports, together with Trondheim in the centre of

the country and also on the coast, are considered so important

to Avinor that they comprise three corporate divisions in their

own right, along with the fourth, Oslo. The other 42 airports make

up the fifth division. Expenditure at Bergen currently totals

USD693 million on a new terminal to open in 2017 while USD2.2

billion is allocated also to a new terminal (2) at Oslo.

Avinor intends to invest NOK37 billion (EUR4.9 billion/USD5.5

billion) in the 2014-2023 period

In all Avinor intends to invest NOK37 billion (EUR4.9

billion/USD5.5 billion) in the 2014-2023 period - the largest

investment made by the company since Oslo Airport was

constructed.

he only certainty is volatility. Private funding for airports is more

likely now

There can be no certainty about the direction the oil price will

take; if it will quickly rebound or whether there will be a long

period of depressed prices which make production barely

sustainable in many countries. What is clear is that most of the

biggest producers - the BPs and Statoils for example - believe

the latter alternative is more likely. On balance, that will be more

beneficial than disadvantageous to airlines and their customers

and generate more travel, which has a positive impact on

airports.

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(continue)It is equally clear that the big investments in airport

infrastructure in many countries are often dependent on a flow of

funds from what have, hitherto, been profitable state investments

in oil production or where private producers have undertaken the

extraction and paid for the privilege through taxes and royalties.

Some of these airport investments do now seen to be at risk and

even where infrastructure spending is modest some projects

will, at least, be suspended.

this set of circumstances may be the push in the direction of

airport privatisation

Ironically, this set of circumstances may be the push in the

direction of airport privatisation, or further push where it already

exists, that is required in some countries. Variations on the word

„private‟ appear 23 times in this report but the acronym PPP

(public-private-partnership) surprisingly only twice; in respect of

Nigeria and Oman.

But as CAPA revealed in the related report

http://centreforaviation.com/analysis/ppps-could-reinvigorate-us-

airport-privatisation-191920 airport PPPs are becoming

increasingly popular globally and especially so where there is a

„pipeline‟ of opportunities for potential private sector

investors/operators rather than just random individual ones.

In many of the countries in this report - for example Oman, Saudi

Arabia, Egypt, Iran and Iraq (political developments permitting),

Russia (ditto), Nigeria, the US etc – that is the case.

There is no doubt there are opportunities to be exploited that will

reduce the burden on challenged states - but the private sector

will only come to the rescue if it is sure the public one can also

play its part; in this new paradigm of ultra low oil prices that may

become a more palatable option.

http://centreforaviation.com

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