#GCC and #MiddleEast Finance News: 26 Aug 2009

Wednesday, 26 August 2009

Dubai's Nakheel sells stake in Australia's Mirvac

Dubai state-owned property developer Nakheel has sold the last of its stake in Australian developer Mirvac Group (MGR.AX) for A$200 million dollars ($167.6 million), the Australian stock exchange said on Wednesday.

Deutsche Securities Australia bought Nakheel's 172 million shares in Mirvac at A$1.16 a share, it said in a regulatory filing.

Nakheel, which faces massive debt repayment at year-end, told Reuters last year that it had planned to raise its 12.5 percent stake in Mirvac to just under 20 percent.

Background of Nakheel + Australia:
http://rupertbumfrey.blogspot.com/2009/08/dubai-group-sells-mirvac-stake.html
http://rupertbumfrey.blogspot.com/2009/04/nakheel-has-no-plans-to-lower-its-stake.html
http://rupertbumfrey.blogspot.com/2009/04/dubai-developer-abandons-bid-for-sydney.html

FT.com / Lex / Macroeconomics & markets - Pakistan

Gosaibi’s personal assets on the line : Charts & Numbers

IPIC eyes Papua New Guinea gas stake

Abu Dhabi’s International Petroleum Investment Company (IPIC) may buy a direct stake in a Papua New Guinea liquefied natural gas (LNG) development, increasing its indirect holding in the big gas export project.

Oil Search, an Australian oil and gas firm that owns 34 per cent of PNG LNG, has said it is close to a deal to sell a 3.5 per cent interest in the project to IPIC, the Abu Dhabi Government-owned energy investment company, to help raise development funds. It said the transaction’s price would be disclosed once the companies had reached an agreement.

PNG LNG is one of several very large developments planned to boost gas exports from Australasia to energy hungry countries in the Far East such as China. Oil Search, which has teamed up with Exxon Mobil and some smaller firms to develop PNG LNG, has estimated the project’s cost at US$11 billion (Dh40.37bn) to $12.5bn. That would include the development of gasfields, pipelines and the liquefaction plant. Oil Search’s share of the investment could be as high as US$4.8bn.

Analysts said selling part of the project was one of a number of options Oil Search could pursue to raise the money. Based on an earlier estimate by JPMorgan, a 3.5 per cent stake in PNG LNG could be worth about US$700 million.END

Kurdistan oil strike delivers barrels by the million

Gulf Keystone Petroleum may have found up to six times as much oil in Iraqi Kurdistan as it originally thought, making its oil strike the second multibillion barrel discovery in the region this year.

After encountering more oil while drilling its Shaikan-1 test well deeper, the British company said it revised its estimate of oil in place to between 1.5 billion and 3 billion barrels. That is up from the 300 million and 500 million barrel estimate it made earlier this month, and could translate to as much as 2 billion barrels of recoverable crude.

“The Shaikan-1 is proving to be a value-transforming discovery for Gulf Keystone,” said Todd Kozel, the executive chairman of the company. “Even at this early stage, the commerciality of this discovery is substantially strengthened.”

Dubai's services are the world's most expensive

Dubai is the most expensive city for services in a global survey from UBS investment bank, especially when it comes to restaurant meals and hotel stays.

The average cost of a basket of 27 services in the city, from haircuts to phone charges and dry cleaning, is US$890 (Dh3,268), making it the most expensive city of the 73 surveyed around the world. It was a steep jump from 28th place of 71 cities on the survey just three years ago, with an average cost of $470.

The latest result places it far above the average – , $503 –, and well ahead of expensive cities such as London ($630), New York ($770) and Paris ($770), according to UBS’s Price and Earnings Report 2009.

Iraqi official seeks new oilfield deals

The Iraqi oil minister hopes that halving the amount of upfront payments it will seek from foreign companies bidding to develop its oilfields will result in more deals.

Ministry officials said yesterday that Iraq would seek US$1.2 billion (Dh4.4bn) in signature bonuses from firms signing long-term service contracts to develop oilfields in the country’s second post-war bidding round, which is due to take place in November.

That is down from $2.6bn of bonuses sought in the first round, which was held in late June and resulted in seven of the eight contracts on offer being left on the table.

Dubai will have to learn to live with its debts

As the saying goes: “In the midst of life, we are in debt”, and never was this more true than now.

The state of having a financial obligation to somebody else is so commonplace these days that the old fiscal rectitudes have gone for good, replaced by a willingness to pile on the debt in all aspects of life.

We drive from our mortgaged houses in hire-purchase cars fuelled by credit-card petrol on bond-issue roads and never give it a second thought.

For the country’s prosperity, better bankruptcy laws

In England the first laws on bankruptcy were passed in 1542 in the time of King Henry VIII. But even then the concept was not unknown or unheard of in our region. The second chapter of the Quran includes the provision that an insolvent person should be allowed time to settle his debts.

And in fact, ever since trade was established, it has been common for traders and merchants who have run out of money to flee to foreign countries where their debts could not reach them. In the UAE, we have recently witnessed many instances of a foreign partner or trader running from his creditors to an unknown land without notice, burdening his local partner or sponsor with the liabilities and criminal penalties.

Even in extreme cases there exists significant reluctance to declare bankruptcy though there are 255 distinct provisions in the UAE Federal Commercial Transactions Law No 18 of 1993 that allow individuals and businesses to do so. In addition to these federal laws, DIFC, the region’s largest free trade zone, has its own insolvency laws that are clear, well-drafted and based mainly on the English legal system.

Saad Islamic bond issue may be dissolved

Holders of a $650 million Islamic bond issued by a unit of troubled Saudi firm Saad have been asked to vote on dissolving the sukuk, trustee Citi said on Tuesday.

Citi said a "dissolution event" had taken place, triggering the bondholder vote.

The bond would be dissolved if holders of 25 percent of the sukuk agree to the proposal, or if Citi was directed by an extraordinary resolution of the sukuk holders, the bank said in a statement to Bahrain's stock exchange.

Legal battles weighing on Saad

The Saad Group’s Health Science Centre gleams, exuding the ambience of a grandiose five-star hotel rather than what it is: a hospital wing in eastern Saudi Arabia.

In the reception, a huge chandelier hangs from the ceiling, the centre of which is decorated with an ornate, stained-glass dome. The walls stretching up the building’s eight floors are clad in decorated marble.

The oncology centre is the latest addition to the more than 700-bed Saad Specialist Hospital, a SR2bn ($534m) complex that dominates the buildings around it in Al Khobar, an oil town in Saudi Arabia’s east. It employs some 4,000 people and is a showpiece asset of Maan al-Sanea, the Saudi billionaire who is battling to save his business empire in the face of financial difficulties, allegations of fraud and a number of lawsuits.