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Sunday, 20 November 2016

North Sea oil producers chart a course for revival

North Sea oil producers chart a course for revival:
"A low-rent serviced office squeezed between a railway and a main road in Aberdeen might not sound like the typical headquarters for an oil company backed by the might of Blackstone, the US private equity group, and GIC, the Singaporean sovereign wealth fund.

The no-frills atmosphere is even more surprising when considered that the company, Siccar Point Energy, this month agreed to pay up to $1bn for the UK business of Austria’s OMV in a deal that will make it a partner of oil majors BP, Statoil and Chevron in some of the biggest remaining North Sea fields.

So lean is the 13-person organisation that Jonathan Roger, Siccar’s Scottish chief executive and a veteran North Sea operator, personally makes tea for visitors in the absence of an assistant. “We’re all about value creation,” he says."

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How Opec’s leaders can smash the Texas upstarts | The National

How Opec’s leaders can smash the Texas upstarts | The National:
"The Permian period, which ended 250 million years ago, was a good time for the global oil industry. The rocks of that time now hold much of the Middle East’s gas, including the world’s largest field, between Qatar and Iran. But Permian rocks on the other side of the world are now a threat to Opec, and an alluring but dangerous prize for international oil companies.

The Permian Basin of west Texas and Mexico has emerged as the most resilient play in the US oil sector. Proximity to pipelines, low drilling cost and a layer cake of geology that offers multiple drilling targets have kept activity high. A well that cost up to US$11 million in 2014 can now be drilled for about $7m.


This month, the United States Geological Survey published its estimate that just one rock formation – the Wolfcamp Shale – in this area contains another 20 billion barrels of oil and 16 trillion cubic feet of gas yet to be found. In September, the oil corporation Apache estimated it had found 75 trillion cubic feet of gas and 3 billion barrels of oil in part of the basin it called the Alpine High area."

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Large Saudi bank cuts money quote; rates may fall back below repo | Reuters

Large Saudi bank cuts money quote; rates may fall back below repo | Reuters:
"Saudi Arabia's biggest commercial bank cut its quote for three-month money in the interbank market on Sunday in a signal that rates could fall further as a liquidity crunch in the banking system eases.

Saudi interbank offered rates soared this year, pressuring companies and banks seeking to raise funds, as low oil prices slashed flows of petrodollars into banks and forced the government to issue bonds domestically to fund a big budget deficit.

Three-month SAIBOR hit a seven-year high of 2.386 percent last month, from below 0.80 percent in August 2015. In a sign of unusual stress on the system, it rose above the central bank's repurchase rate of 2.00 percent, which the central bank uses to supply funds overnight to banks caught short of money."

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MIDEAST STOCKS-Abu Dhabi hit after bank merger talk quashed; Saudi slips but Egypt resilient | Reuters

MIDEAST STOCKS-Abu Dhabi hit after bank merger talk quashed; Saudi slips but Egypt resilient | Reuters:
"Shares of three of Abu Dhabi's top lenders pulled back on Sunday after the banks denied they were in merger talks, while Saudi shares were hit by profit taking.

Egypt's stock market gained as foreign funds continued to accumulate blue chips.

Abu Dhabi's index dropped 1.7 percent as Union National Bank retreated 5.2 percent and Abu Dhabi Commercial Bank lost 2.7 percent after both lenders issued separate statements on Sunday denying last week's Bloomberg report that the two lenders were involved in merger talks."

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Abu Dhabi bank shares fall as merger talks are denied | The National

Abu Dhabi bank shares fall as merger talks are denied | The National:
"Banking shares in Abu Dhabi fell sharply on Sunday, as ADCB, ADIB and UNB distanced themselves from talks of further consolidation within the sector.

Shares rallied last week following rumours that ADCB and UNB may join forces, with ADIB and Hilal Bank considering a similar tie up.

The rumours came in the wake of the announcement in June of a merger between FGB and NBAD, which will create the Middle East’s largest bank by assets."

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Recovery in Dubai property market not expected until late 2017, says Cluttons | The National

Recovery in Dubai property market not expected until late 2017, says Cluttons | The National:
"Prices in Dubai’s residential market continued to fall during the third quarter of 2016, dropping by a further 2.6 per cent, according to a new report by Cluttons.

The firm’s Winter 2016/17 Property Market Outlook said residential prices reman 7.4 per cent lower year-on-year, and are 26.7 per cent below the previous market peak in 2008. It argued that residential property values are not expected to stabilise until late 2017 once employment picks up as a result of more infrastructure work being undertaken ahead of the Expo 2020 event, but also sounded a cautionary note on supply levels.


The head of Cluttons Dubai, Murray Strang, said that it is "closely monitoring the level of residential supply coming to the market"."

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GCC dominates third quarter M&A activity in the MENA region | GulfNews.com

GCC dominates third quarter M&A activity in the MENA region | GulfNews.com:

"The GCC dominated deals in the third quarter, representing 92 per cent of total deal value and 77 per cent of total deal activity while the Middle East and North Africa region reported a slowdown in activity recording 74 deals amounting to $5 billion (Dh18.3 billion), compared to 98 deals amounting to $6 billion in the third quarter of 2015 according to EY’s third quarter 2016 M&A report.
According to the latest EY Capital Confidence Barometer (CCB) fewer deals are expected, even as pipelines swell. Unlike global respondents, who see a rebound in deal activity from six months ago, interest from Mena executives is on the wane, with 21 per cent expecting their company to pursue a merger or acquisition in the next year.
“Mena companies’ interest in pursuing M&As is lower compared to October last year, and is currently below the long-term average level. The key driver behind this is lower CEO confidence, given the macro-uncertainties in the Mena region. Market fundamentals that are affecting M&A performance such as low interest rate and low growth rate are still prevalent,” said Phil Gandier, Mena Transaction Advisory Services Leader, EY"



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Saudi makes $10.7 billion of delayed payments to private sector: executive quoted | Reuters

Saudi makes $10.7 billion of delayed payments to private sector: executive quoted | Reuters:
"Saudi Arabia's government has made payments of 40 billion riyals ($10.7 billion) that it owed to private sector companies, the kingdom's Arab News newspaper quoted a senior construction industry executive as saying.

With its oil revenues slashed by low crude prices, the government of the world’s largest oil exporter has cut spending sharply this year and reduced or suspended payments owed to construction firms, medical establishments and even some of the foreign consultants who helped to design its economic reforms.

The payment delays have tightened liquidity in the banking system and caused severe financial problems for some companies, particularly those in the construction industry. In recent weeks, top officials have indicated that all or most of the delayed payments would soon be made."

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Abu Dhabi Stocks Drop Most in Month to Lead Decline Across Gulf - Bloomberg

Abu Dhabi Stocks Drop Most in Month to Lead Decline Across Gulf - Bloomberg:
"Abu Dhabi stocks retreated the most in a month after three banks said they were unaware of plans for possible mergers, dashing investor optimism that competition in the emirate’s financial sector will ease.
Abu Dhabi’s ADX General Index fell 1.7 percent after Abu Dhabi Commercial Bank PJSC, Union National Bank PJSC and Abu Dhabi Islamic Bank PJSC made statements to the bourse about reports of potential combinations. All three lenders were suspended briefly before sinking at least 0.8 percent. Saudi Arabia’s Tadawul All Share Index reversed gains of as much as 0.5 percent.
The shares of all three lenders rallied last week on reports the government was considering more financial-institution mergers after combining National Bank of Abu Dhabi PJSC and First Gulf Bank PJSC. The emirate is consolidating companies after the price of oil, one of its main sources of revenue, declined more than 40 percent in the past two years."

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MIDEAST STOCKS-Gulf shares diverge in early trade | Reuters

MIDEAST STOCKS-Gulf shares diverge in early trade | Reuters:
"Gulf equity markets diverged in early trade on Sunday with corporate news buoying Dubai's market and Abu Dhabi's index weighed down by some of last week's top movers.

Dubai's index rose 0.4 percent, buoyed by a 10.8 percent jump in Shuaa Capital after the investment firm announced that Abu Dhabi Financial Group (ADFG) had carried out a previously announced acquisition of 48.36 percent of the firm from Dubai Banking Group, a subsidiary of Dubai Group, for 0.705 dirham a share.

Although the purchase price was well below the market price, some investors are betting ADFG will develop Shuaa into a much bigger company."

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