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QATAR INVESTMENT IN RUSSIA

Qatar’s investments in Russia will further strengthen ties between the Organisation of the Petroleum Exporting Countries (Opec) and non-member oil producers, Opec Secretary-General Mohammad Barkindo told Reuters.

The Qatar Investment Authority (QIA) and global commodities trader Glencore have bought a 19.5 per cent stake in Russia’s Rosneft, the world’s top listed oil company by output.

At a meeting with the heads of Glencore, Italian bank Intesa and the sovereign wealth fund QIA in the Kremlin on Wednesday, Russian President Vladimir Putin said Qatar would take part in hydrocarbon production in Russia.

“This investment project will further strengthen Opec and non-OPEC relations,” Barkindo told Reuters in written comments on Thursday. “The investment [Rosneft deal] is very strategic for all the parties involved.” In an effort late last year to boost oil prices, Russia and Opec agreed to cut crude production jointly in the first such pact in more than a decade. This month, Russia will reduce its output by 100,000 barrels per day as part of the deal.

EUROPE POISED TO RECEIVE MOST IRANIAN CRUDE

Europe is poised to receive the most Iranian crude in about five years this month in a sign that the Persian Gulf nation may be regaining its share of a market it had lost to sanctions.

Arrivals on supertankers will reach 622,581 barrels a day in January, the biggest flows for a single month since at least November 2011, according to ship-tracking and European Union data compiled by Bloomberg. Two Iranian supertankers — Huge and Snow — are en route, bringing about four million barrels between them. Sanctions halted all deliveries back in 2012 and they only restarted early last year as the measures were eased.

“Iran’s been trying to regain their traditional clients – in countries like Greece and Italy — as a priority,” said Robin Mills, chief executive officer of Dubai-based consultant Qamar Energy, who tracks the nation’s oil trade. “Beyond that, it’s an opportunistic push to win additional customers.”

Until the Organization of Petroleum Exporting Countries agreed to restrict output on Nov. 30, producers had been competing for market share globally by pumping as much as they could, driving down pricesas inventories swelled. It’s too soon to say whether the flows from Iran mark a permanent push to regain European market share because most of the ships arriving this month left the country’s ports before Jan. 1, when OPEC’s restrictions took effect.

SIEMENS TO SUPPLY 12 COMPRESSOR TRAINS FOR ONSHORE GAS IN IRAN

Siemens has been awarded a contract by Hampa Engineering to supply 12 compressor trains for two onshore natural gas processing plants in Iran. Under the contract, the company will supply compressor trains each comprising a Siemens STC-SV vertical split compressor for the processing plants, which will be operated by Palayesh Parsian Sepehr.

Siemens Iran CEO Mohsen Nayebzadeh said: “Siemens has been present in Iran since 1868, maintaining a significant local operation. This is the first huge oil and gas order since the easing of sanctions in January 2016. “Our best-in-class technology and our reliable expertise in the Iranian oil and gas business will help the Iranian people develop a sustainable, affordable, and modern electrification system.”

Of the 12 trains, ten will be used for the Mohr C2+ hydrocarbon recovery plant, located in Fars Province in south-central Iran. The plant is designed to process natural gas into C2+ hydrocarbons. Hampa Engineering Corporation managing director Hamid Elyas said: “Siemens is a partner that has all the capabilities necessary to execute such a huge scope of supply, such as the 12 compressor trains for the C2recovery and fractionation project.”

Siemens said that four of the ordered STC-SV compressors will be driven by SGT-700 gas turbines to provide high OPEX benefit. Additionally, four other compressor trains for the Mohr plant will be driven by Siemens SGT-100 gas turbines while two others will be driven by an electric motor.

Part of the hydrocarbons produced at Mohr plant will be delivered to the domestic Iranian gas market while the long-chained hydrocarbons ill be transported in a pipeline to the Iranian coast. The hydrocarbons will be further fractionated to produce important feed stock at the Assaluyeh plant in Bushehr Province for the petrochemical industry, including ethane, propane, and butane.

GCC BELIEVES IN LONG TERM GROWTH

The first phase of United Iron & Steel’s (UIS) Abu Dhabi steel mill is due to open this spring as part of a Dh2 billion, 1.3 million square-foot project set to add 450,000 metric tonnes of galvanised and pre-painted steel coils to the emirate’s industrial output.

UIS, a joint venture between Dubai’s AJ Group and Saudi Air Distributions Company (SAFID) Group, is due to supply most of its output to SAFID, which specialises in providing heating, ventilation and air conditioning (HVAC) products to developers, in a move to secure its vertical supply. SAFID is also expanding its Sharjah plant.

Saudi Arabian businessman Shaikh Mohammad Al Rahbani, whose family holds a controlling interesting in SAFID, said in an interview to Gulf News that the UAE’s business environment was a major factor in UIS’ decision to locate the factory in the Industrial City of Abu Dhabi (ICAD).

Shaikh Mohammad said: “The infrastructure of the country is definitely appealing, and the business-friendly manner in the UAE in general is great for a businessman.” He added: “I think we are going to be quite busy” in the GCC market. “We believe in the future there and the long-term future of growth.”

He highlighted a lack of red tape and laws and regulations amenable to business as key elements. Everything goes smoothly. I would compare it to European laws in many ways. “From an investor point of view that “svery, very attractive. And then you take diversity in investment as well. Moving to the UAE, to Abu Dhabi, besides all the reasons I’ve mentioned, is to be [able to] diversify your manufacturing unit.”

 

ABRAJ ACQUIRES MAJOR STAKE IN JHIMPIR WIND POWER

Dubai: The Abraaj Group said it has entered into a definitive agreement to acquire a majority stake in Jhimpir Power, a clean energy generation company. JPL Holdings Pte. Ltd. wholly-owns a 50 MW wind power project in the Jhimpir wind corridor in Southeast Pakistan.

The Project achieved financial close in August 2016 and is expected to commence operations in the first quarter of 2018. The Jhimpir wind corridor is an established area for wind projects with 550 MW+ of capacity already operational and a further 1 GW+ under the construction and development phase.

The project will be powered by General Electric wind turbines, with the Huadong Engineering Corporation appointed as the EPC contractor and GE providing the overall operations and maintenance for the Project. “Our investment into the Jhimpir wind corridor marks our second transaction under Abraaj’s dedicated clean energy platform,”

Sev Vettivetpillai, Managing Partner and Global Head of Abraaj’s Thematic Fund Business.

“With a shortage of over 6,000MW and rising power consumption in Pakistan today, we are excited by the sheer size of the clean energy infrastructure opportunity, enabling government policies and the potential of the Jhimpir wind corridor,” he added. “Having invested across the energy value chain in growth markets, including the power sector in Pakistan, we look forward to growing our renewable footprint and consolidating our presence in the sector,” said Vettivetpillai.

Saad Zaman, Partner at The Abraaj Group, added: “We are pleased to announce the investment of Abraaj into JPL Holdings and look forward to building on the momentum we have gained from the financial closure achieved on our first wind project in Pakistan.

“The attractive renewable power policy framework implemented by the government has created a strong impetus for the private sector to invest in clean energy. Leveraging on our combined operational capabilities, project management experience and know-how, we will successfully develop the Jhimpir wind corridor project and enhance power generation in Pakistan.”

The Abraaj Group has comprehensive investment experience across the energy value chain and has invested c. $1 billion in 10 investments in growth markets. In October 2016, Abraaj entered into a definitive agreement to divest its 66.4 per cent shareholding in K-Electric to the Shanghai Electric Power Company Limited, marking one of the largest private sector transactions in Pakistan and representing one of the global power industry’s most well-recognized operational turnaround stories.

DP WORLD CREATES $3.7 B INVESTMENT VEHICLE

Dubai: Dubai Ports operator DP World said on Monday it was partnering with Canadian pension fund manager Caisse de dÈpÙt et placement du QuÈbec to create an investment vehicle worth US$3.7 billion that would invest in ports and terminals worldwide.

DP World will hold a 55 per cent share in the vehicle while Caisse de dÈpÙt, a long-term institutional investor that manages funds for public pension and insurance plans, will own 45 per cent.

The platform will have “a focus on investment-grade countries” excluding the UAE, and will invest mostly in existing assets but with up to 25 per cent in green field opportunities, DP World said. The vehicle will be seeded with two of DP World’s Canadian container terminals located on the Pacific coast in Vancouver and Prince Rupert, it added.

GCC BANKS MAY FACE CHALLENGES FROM WEEK ECONOMIES

Dubai: Weak economic environment will continue weigh on the financial profiles of banks across the Gulf Cooperation Council (GCC) countries in 2017 and 2018, according to banking sector analysts.

“The end of the commodities boom has also increased the pressure on GCC banks’ asset quality and profitability indicators. While we expect to see further weakening in some of these indicators in 2017-2018, we think that GCC banks have built sufficient buffers to make the overall impact on their financial profiles manageable,” said S&P global Ratings credit analyst Mohammad Damak. Over the past one year loan growth to private sector has taken a beating. Growth in lending to the private sector halved to 5 per cent on average as of September 30,2016, compared with 10 per cent in 2015. In 2017-2018, S&P analysts expect this situation to continue as the government’s policy response to lower oil prices continues to take the form of spending cuts and the postponement of infrastructure projects.

SUKUK ISSUANCE POISED TO INCREASE

Dubai: The share of sukuk issuance in core markets such as the Gulf Cooperation Council (GCC) region, Malaysia, Indonesia, Turkey and Pakistan are expected to keep up their market share in 2017 in the total debt capital market issuance despite a significant increase inconventional bond issuances last year by Saudi Arabia, Abu Dhabi and Qatar, according to analysts.

“Sukuk issuance in core markets rose by 26 per cent in 2016 and broadly maintained its share of capital markets funding despite large conventional bond issues. We expect sukuk issuance to grow at a similar rate in 2017 and believe market share will rise as more sovereigns issue sukuk alongside conventional bonds,” said Bashar Al Natoor, Global Head of Islamic Finance New sukuk issuance with a maturity over 18 months from the core markets of the Gulf Cooperation Council (GCC) region, Malaysia, Indonesia, Turkey and Pakistan rose to $40 billion (Dh147 billion) in 2016 from about $32 billion a year earlier. This represented 28.5 per cent of total bond and sukuk issuance in these markets in 2016, down marginally from 29 per cent in 2015.

LEGAL SYSTEM FOR VENTURE CAPITAL FUNDS IN UAE

Abu Dhabi: The UAE government announced on Saturday the establishment of a legal system for venture capital funds. The move comes as part of the projects of the first batch of government accelerators launched earlier by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to expedite the process of achieving the National Agenda goals.

“Approving the controls and obligations governing the venture capital fund is the fruit of a strong cooperation and partnership between the public and private sector, aiming to expand the scopes of funding innovation-based projects in the UAE, Sultan Bin Saeed Al Mansouri, Minister of Economy said.

He added that this decision is a step in the right direction. It will further promote the competitiveness of small and medium-sized businesses as well as the national business especially in innovation and technology-based areas. In the world of investment, venture capital is prominent and innovative measure used to fund leading projects and businesses and provide success factors especially in the establishment phases. This will, undoubtedly, reflect positively on the UAE march towards entrenching the concepts of innovations and knowledge and will help achieve the governmental goal of placing the UAE among the top ten countries in the world of innovation by 2021, Al Mansouri concluded A venture capital fund is defined as a special fund that invests in the highly risky investments like new projects, technologies and troubled projects, as well as in businesses with new and innovative ideas especially in technological fields.

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