US shale boom begins to cool | Financial Times:
The US shale oil industry is slowing as logistical challenges including labour costs and a lack of adequate pipeline capacity pile up, the chief executives of some of the largest production and oilfield services companies have warned this week.
Evidence is accumulating that the boom in the industry that began two years ago is cooling off, particularly in what has been its incandescent centre, the Permian Basin of western Texas and eastern New Mexico.
At a Barclays conference in New York this week, the chief executives of Schlumberger and Halliburton, the world’s largest and third-largest listed oilfield services companies, both highlighted a slowdown in the number of new wells being brought into production. Jeff Miller, chief executive of Halliburton, talked about a “decrease in customer urgency” that had put pressure on the prices the company could charge in several parts of the US.
Thursday, 6 September 2018
Greater controls may be silver lining in Abraaj collapse - The National
Greater controls may be silver lining in Abraaj collapse - The National:
The collapse of Abraaj Group may disrupt private equity businesses in the Middle East and North Africa, which have registered a decline in number of deals and exits in recent years, but the fallout may also help pave the way for greater controls that will boost investor confidence, analysts said.
“Most investors see Abraaj as a standalone issue,” said Sunaina Sinha, managing partner of UK-based Cebile Capital, which helps private equity firms find investors. “However, the story poses questions for Mena private equity, such as...what action will be taken – both against the company and its directors, and to strengthen the industry going forward?”
Abraaj, once the Middle East’s biggest buyout firm with almost $14 billion of assets under management, has faced a liquidity and reputational crisis since four investors in its $1bn healthcare vehicle alleged mismanagement of funds in February and hired investigators to find out where their money had gone.
The collapse of Abraaj Group may disrupt private equity businesses in the Middle East and North Africa, which have registered a decline in number of deals and exits in recent years, but the fallout may also help pave the way for greater controls that will boost investor confidence, analysts said.
“Most investors see Abraaj as a standalone issue,” said Sunaina Sinha, managing partner of UK-based Cebile Capital, which helps private equity firms find investors. “However, the story poses questions for Mena private equity, such as...what action will be taken – both against the company and its directors, and to strengthen the industry going forward?”
Abraaj, once the Middle East’s biggest buyout firm with almost $14 billion of assets under management, has faced a liquidity and reputational crisis since four investors in its $1bn healthcare vehicle alleged mismanagement of funds in February and hired investigators to find out where their money had gone.
Crude Sinks as Emerging-Market Tumult Leads to Risk-Off Mood - Bloomberg
Crude Sinks as Emerging-Market Tumult Leads to Risk-Off Mood - Bloomberg:
Crude plunged to a two-week low as emerging-market stocks tumbled to the edge of bear market territory.
Futures in New York slid 1.4 percent on Thursday. Emerging-market stocks extended losses from a January peak to 20 percent, the threshold of a bear market. Meanwhile, the Energy Information Administration reported rising fuel stockpiles across the U.S. at the same time as supplies at the nation’s largest crude distribution hub in Cushing, Oklahoma, also expanded last week.
“Bear market territory or not, there is some weakness there,” said Brian Kessens, who helps manage $16 billion in energy assets at Tortoise. Investors are focusing on “what that might mean in the future for global oil demand. It’s just a risk-off day.”
Crude plunged to a two-week low as emerging-market stocks tumbled to the edge of bear market territory.
Futures in New York slid 1.4 percent on Thursday. Emerging-market stocks extended losses from a January peak to 20 percent, the threshold of a bear market. Meanwhile, the Energy Information Administration reported rising fuel stockpiles across the U.S. at the same time as supplies at the nation’s largest crude distribution hub in Cushing, Oklahoma, also expanded last week.
“Bear market territory or not, there is some weakness there,” said Brian Kessens, who helps manage $16 billion in energy assets at Tortoise. Investors are focusing on “what that might mean in the future for global oil demand. It’s just a risk-off day.”
Al-Gosaibi hasn't signed any new Saudi bank creditors to debt settlement plan- acting CEO | ZAWYA MENA Edition
Al-Gosaibi hasn't signed any new Saudi bank creditors to debt settlement plan- acting CEO | ZAWYA MENA Edition:
Saudi Arabia’s Ahmad Hamad Al-Gosaibi and Brothers (AHAB) hasn't signed any new lenders in the kingdom to the debt settlement plan it agreed with two of its banking creditors in April, a senior official involved in the company’s restructuring said on Thursday.
The family conglomerate defaulted on around 22 billion Saudi riyals ($5.9 billion) of debt in 2009 and while Reuters reported earlier this year that two Saudi Arabian-linked banks had agreed to a restructuring plan, many other banks and financial institutions with links to the company have refused, arguing the terms on offer were not satisfactory.
“No more Saudi banks have joined that process. I will not name the ones that did,” Simon Charlton, AHAB's chief restructuring officer and acting chief executive, said during an on-stage interview at the Corporate Restructuring Summit in Dubai on Thursday.
Saudi Arabia’s Ahmad Hamad Al-Gosaibi and Brothers (AHAB) hasn't signed any new lenders in the kingdom to the debt settlement plan it agreed with two of its banking creditors in April, a senior official involved in the company’s restructuring said on Thursday.
The family conglomerate defaulted on around 22 billion Saudi riyals ($5.9 billion) of debt in 2009 and while Reuters reported earlier this year that two Saudi Arabian-linked banks had agreed to a restructuring plan, many other banks and financial institutions with links to the company have refused, arguing the terms on offer were not satisfactory.
“No more Saudi banks have joined that process. I will not name the ones that did,” Simon Charlton, AHAB's chief restructuring officer and acting chief executive, said during an on-stage interview at the Corporate Restructuring Summit in Dubai on Thursday.
GCC distressed debt market needed to clear problem loans, say experts | ZAWYA MENA Edition
GCC distressed debt market needed to clear problem loans, say experts | ZAWYA MENA Edition:
The development of securitisation laws to allow for banks to package and trade distressed debts is one of a number of capital market reforms that could help to improve both the credit position of banks and the ability of Gulf governments to withstand economic shocks, a leading regional economist has said.
Nasser Saidi, a former economy and industry minister of Lebanon and an ex-first vice-governor of Lebanon’s central bank, told the Corporate Restructuring Summit in Dubai on Wednesday that although bankruptcy laws have been introduced in a number of countries, including Saudi Arabia, the United Arab Emirates and Bahrain, "we are right at the beginning" in terms of developing a legal framework to aid restructuring.
"It also requires securitisation laws," said Saidi, who has also previously advised as chief economist to the Dubai International Financial Centre, but who now runs his own consultancy firm, Nasser Saidi & Associates. "If you develop securitisation laws, that allows you to develop a CLO (collateralised loan obligations) market and CDO (collateralised debt obligations) market. We also need that.
The development of securitisation laws to allow for banks to package and trade distressed debts is one of a number of capital market reforms that could help to improve both the credit position of banks and the ability of Gulf governments to withstand economic shocks, a leading regional economist has said.
Nasser Saidi, a former economy and industry minister of Lebanon and an ex-first vice-governor of Lebanon’s central bank, told the Corporate Restructuring Summit in Dubai on Wednesday that although bankruptcy laws have been introduced in a number of countries, including Saudi Arabia, the United Arab Emirates and Bahrain, "we are right at the beginning" in terms of developing a legal framework to aid restructuring.
"It also requires securitisation laws," said Saidi, who has also previously advised as chief economist to the Dubai International Financial Centre, but who now runs his own consultancy firm, Nasser Saidi & Associates. "If you develop securitisation laws, that allows you to develop a CLO (collateralised loan obligations) market and CDO (collateralised debt obligations) market. We also need that.
UPDATE 1-Saudi bourse says IPOs to increase, futures to aid foreign funds | Reuters
UPDATE 1-Saudi bourse says IPOs to increase, futures to aid foreign funds | Reuters:
The Saudi Stock Exchange expects share listings to pick up next year while the launch of stock index futures should smooth an influx of money from overseas, its chief executive said on Wednesday.
The Saudi market, with a capitalisation of about $500 billion, is bracing for heavy inflows of foreign funds in 2019 — analysts predict $20 billion or more — as it joins emerging market indexes compiled by MSCI and FTSE Russell.
Absorbing that amount of money without destabilising stock prices may be difficult. But Khalid al-Hussan said authorities were working on several initiatives to deepen the market with initial public offers of equity, helping to make it more stable.
The Saudi Stock Exchange expects share listings to pick up next year while the launch of stock index futures should smooth an influx of money from overseas, its chief executive said on Wednesday.
The Saudi market, with a capitalisation of about $500 billion, is bracing for heavy inflows of foreign funds in 2019 — analysts predict $20 billion or more — as it joins emerging market indexes compiled by MSCI and FTSE Russell.
Absorbing that amount of money without destabilising stock prices may be difficult. But Khalid al-Hussan said authorities were working on several initiatives to deepen the market with initial public offers of equity, helping to make it more stable.
Crude pulls back on rising U.S. fuel stockpiles | Reuters
Crude pulls back on rising U.S. fuel stockpiles | Reuters:
Crude futures reversed course, falling more than $1 a barrel on Thursday after U.S. data showed gasoline inventories rose unexpectedly last week, overshadowing a bullish drawdown in crude.
U.S. crude inventories fell more than expected last week as refining runs increased, while gasoline and distillate inventories rose, the Energy Information Administration said on Thursday. [EIA/S]
Stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures USOICC=ECI rose by 549,000 barrels, EIA said.
Crude futures reversed course, falling more than $1 a barrel on Thursday after U.S. data showed gasoline inventories rose unexpectedly last week, overshadowing a bullish drawdown in crude.
U.S. crude inventories fell more than expected last week as refining runs increased, while gasoline and distillate inventories rose, the Energy Information Administration said on Thursday. [EIA/S]
Stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures USOICC=ECI rose by 549,000 barrels, EIA said.
Qatar could invest in German LNG terminal: Qatar energy minister | Reuters
Qatar could invest in German LNG terminal: Qatar energy minister | Reuters:
Qatar’s energy minister on Thursday threw his support behind the possible cooperation of Qatar Petroleum, the world’s top supplier of liquefied natural gas (LNG), on a potential German LNG terminal.
Bader Mohammed al-Sada told Reuters that discussions were under way but it would be premature to talk about any specific investment terms because that would depend on the size of the terminal.
On Wednesday Qatar Petroleum said it was in talks with Germany’s RWE and rival Uniper about cooperating on a potential LNG terminal.
Qatar’s energy minister on Thursday threw his support behind the possible cooperation of Qatar Petroleum, the world’s top supplier of liquefied natural gas (LNG), on a potential German LNG terminal.
Bader Mohammed al-Sada told Reuters that discussions were under way but it would be premature to talk about any specific investment terms because that would depend on the size of the terminal.
On Wednesday Qatar Petroleum said it was in talks with Germany’s RWE and rival Uniper about cooperating on a potential LNG terminal.
Qatar calls for increased investment in oil and gas markets | Reuters
Qatar calls for increased investment in oil and gas markets | Reuters:
Qatar’s energy minister on Thursday called for oil-producing countries to boost investment in the oil and gas sector given a recovery in the price of oil, but said he did not back setting any specific targets for such investment.
Energy Minister Mohammed al-Sada said he expected the issue to be addressed during a meeting of OPEC and non-OPEC countries in Algeria at the end of the month.
“While the oil price has been recovering, the only thing now is to see an adequate level of investment going back to the oil sector,” Sada told Reuters ahead of a bilateral Qatar-German investment conference.
Qatar’s energy minister on Thursday called for oil-producing countries to boost investment in the oil and gas sector given a recovery in the price of oil, but said he did not back setting any specific targets for such investment.
Energy Minister Mohammed al-Sada said he expected the issue to be addressed during a meeting of OPEC and non-OPEC countries in Algeria at the end of the month.
“While the oil price has been recovering, the only thing now is to see an adequate level of investment going back to the oil sector,” Sada told Reuters ahead of a bilateral Qatar-German investment conference.
MIDEAST STOCKS-Saudi extends losses on emerging market turbulence | Reuters
MIDEAST STOCKS-Saudi extends losses on emerging market turbulence | Reuters:
Saudi stocks extended losses on Thursday after a 3 percent plunge a day earlier, as investors were rattled by turbulence in emerging markets, while other Gulf markets were mixed with Dubai shares lifted by property stocks.
The Saudi index ended 0.4 percent lower with Saudi Basic Industries dropping 2 percent and refiner Petro Rabigh falling 3.8 percent.
The index is still up 6 percent so far this year but has lost about 7.6 percent in this quarter. Some brokers said the market was ripe for a correction after heavy selling this week.
Saudi stocks extended losses on Thursday after a 3 percent plunge a day earlier, as investors were rattled by turbulence in emerging markets, while other Gulf markets were mixed with Dubai shares lifted by property stocks.
The Saudi index ended 0.4 percent lower with Saudi Basic Industries dropping 2 percent and refiner Petro Rabigh falling 3.8 percent.
The index is still up 6 percent so far this year but has lost about 7.6 percent in this quarter. Some brokers said the market was ripe for a correction after heavy selling this week.
Saudi Arabia’s curious romance with Silicon Valley | Financial Times
Saudi Arabia’s curious romance with Silicon Valley | Financial Times:
A Gulf country splashing billions of dollars on overseas investments is a familiar tale. Remember Dubai before leverage brought it to the brink of financial collapse? How new investment vehicles proliferated in Abu Dhabi over the past decade and how Qatar’s sovereign wealth fund became, in record time, one of the most courted global investors?
The city-states of the Gulf have gone quieter in recent years. But now their big brother has stepped in. Saudi Arabia, the largest oil exporter long dismissed as lethargic and excessively prudent, is rushing to catch up with its neighbours in a variety of ways.
Its overseas investment targets are so far not the usual Gulf favourites: iconic buildings, financial services or a football club (though it is said to be eyeing a Premier League team). Instead, the absolute monarchy is betting big on technology.
A Gulf country splashing billions of dollars on overseas investments is a familiar tale. Remember Dubai before leverage brought it to the brink of financial collapse? How new investment vehicles proliferated in Abu Dhabi over the past decade and how Qatar’s sovereign wealth fund became, in record time, one of the most courted global investors?
The city-states of the Gulf have gone quieter in recent years. But now their big brother has stepped in. Saudi Arabia, the largest oil exporter long dismissed as lethargic and excessively prudent, is rushing to catch up with its neighbours in a variety of ways.
Its overseas investment targets are so far not the usual Gulf favourites: iconic buildings, financial services or a football club (though it is said to be eyeing a Premier League team). Instead, the absolute monarchy is betting big on technology.
Why Gulf Banks Are Merging Like Never Before: QuickTake - Bloomberg
Why Gulf Banks Are Merging Like Never Before: QuickTake - Bloomberg:
Abu Dhabi is considering a merger between three of its banks, potentially the emirate’s second tie-up between lenders in just over a year. Saudi Arabia had its first bank merger in 20 years in May. Lenders across the region are undergoing possibly the biggest overhaul it’s witnessed, with at least half a dozen involved in takeover or merger talks.
1. Why are so many Gulf banks merging?
The region is heavily over-banked and lenders are being forced to merge as they seek to stay competitive in an era of lower oil prices. There are more than 73 listed banks in the six-nation Gulf Corporation Council, according to data compiled by Bloomberg, catering to a population of around 51 million. Regional banks are heavily reliant on government deposits, and those have been dwindling in sync with crude prices.
Abu Dhabi is considering a merger between three of its banks, potentially the emirate’s second tie-up between lenders in just over a year. Saudi Arabia had its first bank merger in 20 years in May. Lenders across the region are undergoing possibly the biggest overhaul it’s witnessed, with at least half a dozen involved in takeover or merger talks.
1. Why are so many Gulf banks merging?
The region is heavily over-banked and lenders are being forced to merge as they seek to stay competitive in an era of lower oil prices. There are more than 73 listed banks in the six-nation Gulf Corporation Council, according to data compiled by Bloomberg, catering to a population of around 51 million. Regional banks are heavily reliant on government deposits, and those have been dwindling in sync with crude prices.
Abraaj fund unit receives $1 bid | ZAWYA MENA Edition
Abraaj fund unit receives $1 bid | ZAWYA MENA Edition:
The Abraaj Group has received a $1 bid for its fund unit from private equity firm Actis, sources familiar with the matter said.
Sources indicated that the fund unit had managed around $14 billion at its peak and was one of the most influential emerging market investors, Bloomberg News reported.
Chicago’s Vistria Group, Rohatyn Group, Kuwait’s Agility Public Warehousing Co, and Abu Dhabi Financial Group have also made bids, the sources said.
The Abraaj Group has received a $1 bid for its fund unit from private equity firm Actis, sources familiar with the matter said.
Sources indicated that the fund unit had managed around $14 billion at its peak and was one of the most influential emerging market investors, Bloomberg News reported.
Chicago’s Vistria Group, Rohatyn Group, Kuwait’s Agility Public Warehousing Co, and Abu Dhabi Financial Group have also made bids, the sources said.
EFG Hermes carry out first IPO on Omani bourse | ZAWYA MENA Edition
EFG Hermes carry out first IPO on Omani bourse | ZAWYA MENA Edition:
EFG Hermes on Wednesday announced the completion of Dhofar Power Company’s initial public offering (IPO) on Muscat Securities Market at a total value of $52 million.
The leading investment bank was the global coordinator and bookrunner of the IPO, while Bank Dhofar acted as the placement manager, the Egyptian firm highlighted in a statement.
The bank’s first implemented transaction in the Omani market is part of its expansion strategy, Mohamed Ebeid, Co-CEO of EFG Hermes, said.
EFG Hermes on Wednesday announced the completion of Dhofar Power Company’s initial public offering (IPO) on Muscat Securities Market at a total value of $52 million.
The leading investment bank was the global coordinator and bookrunner of the IPO, while Bank Dhofar acted as the placement manager, the Egyptian firm highlighted in a statement.
The bank’s first implemented transaction in the Omani market is part of its expansion strategy, Mohamed Ebeid, Co-CEO of EFG Hermes, said.
Oil dips on emerging market turbulence, but looming Iran sanctions support | Reuters
Oil dips on emerging market turbulence, but looming Iran sanctions support | Reuters:
Oil prices dipped on Thursday as emerging market turbulence weighed on sentiment, while a deadline neared for a potential new round of U.S. tariffs on another $200 billion of Chinese goods.
U.S. sanctions against Iran, however, prevented prices from falling further as they are expected to tighten the market after being implemented from November, traders said.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $68.59 per barrel at 0645 GMT, down 13 cents, or 0.2 percent, from their last settlement.
Oil prices dipped on Thursday as emerging market turbulence weighed on sentiment, while a deadline neared for a potential new round of U.S. tariffs on another $200 billion of Chinese goods.
U.S. sanctions against Iran, however, prevented prices from falling further as they are expected to tighten the market after being implemented from November, traders said.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $68.59 per barrel at 0645 GMT, down 13 cents, or 0.2 percent, from their last settlement.
MIDEAST STOCKS-Saudi lead losses among Gulf markets on emerging market woes | Reuters
MIDEAST STOCKS-Saudi lead losses among Gulf markets on emerging market woes | Reuters:
Saudi stocks extended losses on Thursday after a more than 3 percent plunge a day earlier, leading losses among Gulf markets as investors remained concerned about turbulence in emerging markets and concerns over global trade disputes.
The Saudi index was down 0.8 percent. Saudi Basic Industries dropped 2 percent and refiner Petro Rabigh fell 4 percent as weak oil prices further dented sentiment.
The index is still up 6 percent so far this year but has lost about 7.8 percent in this quarter. Some brokers said the market was ripe for a correction after heavy selling this week.
Saudi stocks extended losses on Thursday after a more than 3 percent plunge a day earlier, leading losses among Gulf markets as investors remained concerned about turbulence in emerging markets and concerns over global trade disputes.
The Saudi index was down 0.8 percent. Saudi Basic Industries dropped 2 percent and refiner Petro Rabigh fell 4 percent as weak oil prices further dented sentiment.
The index is still up 6 percent so far this year but has lost about 7.8 percent in this quarter. Some brokers said the market was ripe for a correction after heavy selling this week.
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