GIP and Brookfield close in on $15bn Abu Dhabi gas pipeline deal | Financial Times:
Global Infrastructure Partners and Brookfield Asset Management are close to taking a stake in the Abu Dhabi National Oil Company’s natural gas pipelines, according to people familiar with the matter.
Under the deal the investors would take a 49 per cent share worth more than $15bn including debt, the people said.
The discussions have been under way for months but a deal now would come just as resource rich-nations are hit by the drop in energy prices and revenues triggered by the coronavirus pandemic.
Adnoc has sold stakes worth billions of dollars in energy infrastructure in recent years as Abu Dhabi seeks to privatise assets to diversify funding streams and attract foreign capital to the emirate’s energy company. This deal would be part of Abu Dhabi’s established revenue maximisation strategy, said one of the people.
Tuesday 2 June 2020
Oil up more than 3% ahead of OPEC+ meeting and on easing lockdowns - Reuters
Oil up more than 3% ahead of OPEC+ meeting and on easing lockdowns - Reuters:
Oil prices climbed by more than $1 a barrel on Tuesday on hopes that major crude producers will agree to extend output cuts during a video conference expected to be held this week and as countries and U.S. states begin to reopen after coronavirus lockdown.
Brent crude LCOc1 settled at $39.57 a barrel, rising $1.25, or 3.3%. U.S. West Texas Intermediate crude (WTI) CLc1 settled at $36.81 a barrel, jumping $1.37, or 3.9%.
Both benchmarks neared three-week highs.
“There’s the anticipation that OPEC+ is going to agree to extend their current levels for another two months, and at the same time, the market anticipates that the reopening of economies around the world will increase demand and will get us in a position such that, by August, the oil market will be in balance,” said Andy Lipow, president of consultants Lipow Oil Associates.
Oil prices climbed by more than $1 a barrel on Tuesday on hopes that major crude producers will agree to extend output cuts during a video conference expected to be held this week and as countries and U.S. states begin to reopen after coronavirus lockdown.
Brent crude LCOc1 settled at $39.57 a barrel, rising $1.25, or 3.3%. U.S. West Texas Intermediate crude (WTI) CLc1 settled at $36.81 a barrel, jumping $1.37, or 3.9%.
Both benchmarks neared three-week highs.
“There’s the anticipation that OPEC+ is going to agree to extend their current levels for another two months, and at the same time, the market anticipates that the reopening of economies around the world will increase demand and will get us in a position such that, by August, the oil market will be in balance,” said Andy Lipow, president of consultants Lipow Oil Associates.
Oil’s Rally Encourages U.S. Shale and Complicates Task for OPEC+ - Bloomberg
Oil Prices for June 2, 2020: Brent Crude, WTI - Bloomberg:
As OPEC+ producers head toward a consensus on extending their output curbs, oil’s rally is prompting some U.S. producers to open their taps once again.
With U.S. futures rising as much as 3% on Tuesday, resuming its record advance last month, concern is emerging that the increase will encourage more American shale output. That could undercut efforts by OPEC and allies such as Russia to cut supplies in a bid to shield the market from demand losses in the wake of the coronavirus crisis.
Further evidence of that threat emerged this week, when U.S. driller Parsley Energy Inc. said it’s turning oil wells back on just weeks after shutting them off, illustrating the shale industry’s agility in responding to rising crude prices. Meanwhile, Russia and several other OPEC+ nations are said to favor extending their current output cuts by a month.
“If everybody magically decides to turn the taps back on and lets the oil back to the surface, now you’ve got 1.5 million to 2 million barrels a day that needs to find a home,” said Stewart Glickman, an energy analyst at CFRA Research.
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As OPEC+ producers head toward a consensus on extending their output curbs, oil’s rally is prompting some U.S. producers to open their taps once again.
With U.S. futures rising as much as 3% on Tuesday, resuming its record advance last month, concern is emerging that the increase will encourage more American shale output. That could undercut efforts by OPEC and allies such as Russia to cut supplies in a bid to shield the market from demand losses in the wake of the coronavirus crisis.
Further evidence of that threat emerged this week, when U.S. driller Parsley Energy Inc. said it’s turning oil wells back on just weeks after shutting them off, illustrating the shale industry’s agility in responding to rising crude prices. Meanwhile, Russia and several other OPEC+ nations are said to favor extending their current output cuts by a month.
“If everybody magically decides to turn the taps back on and lets the oil back to the surface, now you’ve got 1.5 million to 2 million barrels a day that needs to find a home,” said Stewart Glickman, an energy analyst at CFRA Research.
Asia’s Richest Man Nears Deal With Top Mideast Sovereign Funds - Bloomberg
Asia’s Richest Man Nears Deal With Top Mideast Sovereign Funds - Bloomberg:
Three of the largest Middle Eastern sovereign wealth funds are in advanced talks to invest in Reliance Industries Ltd.’s digital arm, people familiar with the matter said, potentially adding to the roster of marquee investors that have piled into the business.
Abu Dhabi’s Mubadala Investment Co. is nearing a deal to invest about $1 billion into Jio Platforms Ltd. and an announcement could come as soon as this week, said the people, who asked not to be identified as the information is private. Reliance, backed by Asia’s richest man Mukesh Ambani, is also in discussions with Abu Dhabi Investment Authority and Saudi Arabia’s The Public Investment Fund, the people said.
Any new investment would add to the $10 billion that Jio Platforms has raised in recent weeks as it starts on early preparations for an overseas listing. High-profile backers from Facebook Inc. to KKR are betting on Jio’s access to India’s massive consumer market, and its potential to shake up traditional industries in the country -- from retail to education and payments -- with its technology.
Three of the largest Middle Eastern sovereign wealth funds are in advanced talks to invest in Reliance Industries Ltd.’s digital arm, people familiar with the matter said, potentially adding to the roster of marquee investors that have piled into the business.
Abu Dhabi’s Mubadala Investment Co. is nearing a deal to invest about $1 billion into Jio Platforms Ltd. and an announcement could come as soon as this week, said the people, who asked not to be identified as the information is private. Reliance, backed by Asia’s richest man Mukesh Ambani, is also in discussions with Abu Dhabi Investment Authority and Saudi Arabia’s The Public Investment Fund, the people said.
Any new investment would add to the $10 billion that Jio Platforms has raised in recent weeks as it starts on early preparations for an overseas listing. High-profile backers from Facebook Inc. to KKR are betting on Jio’s access to India’s massive consumer market, and its potential to shake up traditional industries in the country -- from retail to education and payments -- with its technology.
Companies in GCC states likely to consolidate amid COVID-19: KPMG | ZAWYA MENA Edition
Companies in GCC states likely to consolidate amid COVID-19: KPMG | ZAWYA MENA Edition:
Companies in the Gulf Cooperation Council (GCC) region are expected to consolidate as the downturn caused by the coronavirus pandemic continues to deepen, global audit, tax and advisory firm KPMG said on Tuesday.
Several small and medium enterprises (SMEs), as well as large companies in the region are likely to raise cash to keep the business going, hence merger and acquisition (M&A) activity in Saudi Arabia and other Gulf countries will pick up, according to Ali Maabereh, head of M&A at KPMG in Saudi Arabia.
“The current pandemic is creating a lot of uncertainties and contradictions in what to expect after the dust settles. The expected key impacts on companies are shortages of liquidity and working capital requirements. Though companies might be running a healthy profit and loss, there will be significant pressure on working capital requirements,” he added.
The deals will most likely be in favour of the buyers, and companies who are looking to consolidate will likely accept a low valuation.
Companies in the Gulf Cooperation Council (GCC) region are expected to consolidate as the downturn caused by the coronavirus pandemic continues to deepen, global audit, tax and advisory firm KPMG said on Tuesday.
Several small and medium enterprises (SMEs), as well as large companies in the region are likely to raise cash to keep the business going, hence merger and acquisition (M&A) activity in Saudi Arabia and other Gulf countries will pick up, according to Ali Maabereh, head of M&A at KPMG in Saudi Arabia.
“The current pandemic is creating a lot of uncertainties and contradictions in what to expect after the dust settles. The expected key impacts on companies are shortages of liquidity and working capital requirements. Though companies might be running a healthy profit and loss, there will be significant pressure on working capital requirements,” he added.
The deals will most likely be in favour of the buyers, and companies who are looking to consolidate will likely accept a low valuation.
#Saudi wealth fund suspends plans to change $10 bln loan terms - sources - Reuters
Saudi wealth fund suspends plans to change $10 bln loan terms - sources - Reuters:
Saudi Arabia’s Public Investment Fund (PIF) has suspended plans to change some of the terms of a $10 billion loan it raised last year after some banks voiced reservations, sources said.
Over the last two years, banks have lent billions to the fund, which is the engine of Crown Prince Mohammed bin Salman’s economic transformation plans for Saudi Arabia and aims to increase its assets under management to $400 billion by the end of this year.
This was partly on the expectation that establishing banking relationships would lead to lucrative mandates on capital markets deals.
Banks continue to court the PIF, but a proposal made earlier this year to delay the repayment of a $10 billion bridge loan raised in October was questioned by some of the lenders, two sources familiar with the matter said on condition of anonymity.
Saudi Arabia’s Public Investment Fund (PIF) has suspended plans to change some of the terms of a $10 billion loan it raised last year after some banks voiced reservations, sources said.
Over the last two years, banks have lent billions to the fund, which is the engine of Crown Prince Mohammed bin Salman’s economic transformation plans for Saudi Arabia and aims to increase its assets under management to $400 billion by the end of this year.
This was partly on the expectation that establishing banking relationships would lead to lucrative mandates on capital markets deals.
Banks continue to court the PIF, but a proposal made earlier this year to delay the repayment of a $10 billion bridge loan raised in October was questioned by some of the lenders, two sources familiar with the matter said on condition of anonymity.
UPDATE 2-Emirate of #Sharjah sells $1 bln 7-year dollar sukuk - Reuters
UPDATE 2-Emirate of Sharjah sells $1 bln 7-year dollar sukuk - Reuters:
Sharjah, the third-largest emirate of the United Arab Emirates, sold $1 billion in seven-year sukuk, or Islamic bonds, on Tuesday, according to a document from one of the banks arranging the deal.
The debt sale comes as several governments in the Gulf seek to bolster their finances to face the economic fallout from the coronavirus pandemic and a historic slide in oil prices.
Sharjah set the final spread at 245 basis points (bps) over midswaps for the sukuk, which are Islamic sharia-compliant bonds, according to the document seen by Reuters.
It tightened the spread by 30 bps from where it began marketing the notes earlier on Tuesday.
Sharjah, the third-largest emirate of the United Arab Emirates, sold $1 billion in seven-year sukuk, or Islamic bonds, on Tuesday, according to a document from one of the banks arranging the deal.
The debt sale comes as several governments in the Gulf seek to bolster their finances to face the economic fallout from the coronavirus pandemic and a historic slide in oil prices.
Sharjah set the final spread at 245 basis points (bps) over midswaps for the sukuk, which are Islamic sharia-compliant bonds, according to the document seen by Reuters.
It tightened the spread by 30 bps from where it began marketing the notes earlier on Tuesday.
European, Middle Eastern & African Stocks - Bloomberg #UAE #SaudiArabia #Qatar close
European, Middle Eastern & African Stocks - Bloomberg:
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Emirates to decide on fleet size in the next few months - Reuters
Emirates to decide on fleet size in the next few months - Reuters:
Emirates will decide over the next few months on the size of its future fleet, the Dubai-based airline’s president said on Tuesday.
It is not clear when Emirates, which flew to 157 destinations in 83 countries before the coronavirus pandemic, will start rebuilding its network after grounding passenger flights in March. It has since flown few, limited services.
“We need a little more time to see how this is all going to pan out,” he said in an online interview with industry publication Aviation Week.
A decision will be made once there is greater clarity on whether demand for travel will start to rebound next year, which Clark said depends on a widely available COVID-19 vaccine being developed soon.
Emirates will decide over the next few months on the size of its future fleet, the Dubai-based airline’s president said on Tuesday.
It is not clear when Emirates, which flew to 157 destinations in 83 countries before the coronavirus pandemic, will start rebuilding its network after grounding passenger flights in March. It has since flown few, limited services.
“We need a little more time to see how this is all going to pan out,” he said in an online interview with industry publication Aviation Week.
A decision will be made once there is greater clarity on whether demand for travel will start to rebound next year, which Clark said depends on a widely available COVID-19 vaccine being developed soon.
Oil Prices for June 2, 2020: Brent Crude, WTI - Bloomberg
Oil Prices for June 2, 2020: Brent Crude, WTI - Bloomberg:
Oil rose past $36 a barrel as investors eyed a potential extension of record production curbs by OPEC+ while physical markets showed renewed signs of tightness.
Futures in New York rose around 2.7%. Russia and several producers in the Organization of Petroleum Exporting Countries and its allies are said to favor an extension of one month to existing cuts, with consensus building toward that length within the group, according to three delegates. It was unclear whether OPEC’s key power, Saudi Arabia, had agreed to the suggestion, with the kingdom supporting an additional one to three months of curbs.
Crude is rallying as the market for real barrels of crude is showing renewed signs of strength too. The bearish structure in the nearest futures contracts has disappeared, signaling tighter supplies. Russian Urals crude was bid last week at the highest level since Bloomberg began compiling data, as the nation accelerates record output cuts.
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Futures in New York rose around 2.7%. Russia and several producers in the Organization of Petroleum Exporting Countries and its allies are said to favor an extension of one month to existing cuts, with consensus building toward that length within the group, according to three delegates. It was unclear whether OPEC’s key power, Saudi Arabia, had agreed to the suggestion, with the kingdom supporting an additional one to three months of curbs.
Crude is rallying as the market for real barrels of crude is showing renewed signs of strength too. The bearish structure in the nearest futures contracts has disappeared, signaling tighter supplies. Russian Urals crude was bid last week at the highest level since Bloomberg began compiling data, as the nation accelerates record output cuts.
Middle East News: #Qatar Airways Seeks Flexibility on Deliveries - Bloomberg
Middle East News: Qatar Airways Seeks Flexibility on Deliveries - Bloomberg:
The head of Qatar Airways called on the world’s two major planemakers to ease demands that ailing carriers accept delivery of new aircraft, saying their future relationship was at stake.
Airbus SE and Boeing Co. should accept delivery deferrals until at least 2022, Qatar Airways Chief Executive Officer Akbar Al Baker said in an interview Tuesday with Bloomberg TV.
“What is important is for Boeing and Airbus to show their customers that they are not only there with them in good times, but also in bad times,” Al Baker said. “If they don’t oblige, they will permanently lose us as a customer.”
Al Baker’s comments highlight the intense financial pressure on airlines, especially Gulf-based carriers like Qatar Airways whose business shuttling travelers across the globe has been shriveled by the coronavirus. The CEO said he didn’t know when passengers would begin flying again in significant numbers. He said it would take several years for traffic to return to normal.
The head of Qatar Airways called on the world’s two major planemakers to ease demands that ailing carriers accept delivery of new aircraft, saying their future relationship was at stake.
Airbus SE and Boeing Co. should accept delivery deferrals until at least 2022, Qatar Airways Chief Executive Officer Akbar Al Baker said in an interview Tuesday with Bloomberg TV.
“What is important is for Boeing and Airbus to show their customers that they are not only there with them in good times, but also in bad times,” Al Baker said. “If they don’t oblige, they will permanently lose us as a customer.”
Al Baker’s comments highlight the intense financial pressure on airlines, especially Gulf-based carriers like Qatar Airways whose business shuttling travelers across the globe has been shriveled by the coronavirus. The CEO said he didn’t know when passengers would begin flying again in significant numbers. He said it would take several years for traffic to return to normal.
Coronavirus: Experts warn of expat exodus in GCC, rest of the world | ZAWYA MENA Edition
Coronavirus: Experts warn of expat exodus in GCC, rest of the world | ZAWYA MENA Edition:
The deepening impact of the coronavirus pandemic will force expat workers in the Gulf and around the world to leave their host countries and remittance flows to poor economies will dry up, as a result, experts have warned.
Immediate action is required from host countries to protect the welfare of foreign employees and ensure they remain employed despite the downturn, otherwise, the economic shocks caused by coronavirus will be “magnified,” the International Monetary Fund (IMF) said in a note published late Monday.
“In Gulf states, such as Saudi Arabia and the United Arab Emirates (UAE), which rely on migrant labour from the Middle East, North Africa and Southeast Asia, the drop in the price of oil and economic activity could result in migrants returning home,” authors of the note Antoinette Sayeh, IMF deputy managing director, and Ralph Chami, assistant director of the IMF’s Institute for Capacity Development, said.
“They are likely to join the jobless in their home countries - in labour markets already brimming with unemployed youth - as well as put more pressure on already fragile public health systems. This could heighten social pressure in countries already ill-prepared to deal with the pandemic and possibly also fuel spillover beyond their borders,” they added.
The deepening impact of the coronavirus pandemic will force expat workers in the Gulf and around the world to leave their host countries and remittance flows to poor economies will dry up, as a result, experts have warned.
Immediate action is required from host countries to protect the welfare of foreign employees and ensure they remain employed despite the downturn, otherwise, the economic shocks caused by coronavirus will be “magnified,” the International Monetary Fund (IMF) said in a note published late Monday.
“In Gulf states, such as Saudi Arabia and the United Arab Emirates (UAE), which rely on migrant labour from the Middle East, North Africa and Southeast Asia, the drop in the price of oil and economic activity could result in migrants returning home,” authors of the note Antoinette Sayeh, IMF deputy managing director, and Ralph Chami, assistant director of the IMF’s Institute for Capacity Development, said.
“They are likely to join the jobless in their home countries - in labour markets already brimming with unemployed youth - as well as put more pressure on already fragile public health systems. This could heighten social pressure in countries already ill-prepared to deal with the pandemic and possibly also fuel spillover beyond their borders,” they added.
European, Middle Eastern & African Stocks - Bloomberg #UAE #SaudiArabia #Qatar mid-session
European, Middle Eastern & African Stocks - Bloomberg:
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Updated stock indexes in Europe, Middle East & Africa. Get an overview of major indexes, current values and stock market data in Europe, UK, Germany, Russia & more.
Gulf countries to experience worst economic crisis in history: IIF - Reuters
Gulf countries to experience worst economic crisis in history: IIF - Reuters:
The six Gulf Cooperation Council (GCC) nations are facing their worst economic crisis in history amid the double shock of plunging oil prices and the coronavirus pandemic, the Institute of International Finance (IIF) said.
Overall real gross domestic product (GDP) will contract 4.4% this year, despite some indications that the virus spread has been successfully contained and the easing of some restrictions in recent weeks, said the IIF, a global financial industry body.
Cuts in public spending adopted by regional authorities to contain the widening of their deficits “could more than offset losses stemming from reduced oil exports” but aggregate deficits are still expected to widen to 10.3% of GDP this year from 2.5% in 2019.
The Saudi central bank said yesterday it would inject an additional $13.3 billion into the local banking system to help banks support the private sector, after consumer spending fell sharply in April due to virus containment measures.
The six Gulf Cooperation Council (GCC) nations are facing their worst economic crisis in history amid the double shock of plunging oil prices and the coronavirus pandemic, the Institute of International Finance (IIF) said.
Overall real gross domestic product (GDP) will contract 4.4% this year, despite some indications that the virus spread has been successfully contained and the easing of some restrictions in recent weeks, said the IIF, a global financial industry body.
Cuts in public spending adopted by regional authorities to contain the widening of their deficits “could more than offset losses stemming from reduced oil exports” but aggregate deficits are still expected to widen to 10.3% of GDP this year from 2.5% in 2019.
The Saudi central bank said yesterday it would inject an additional $13.3 billion into the local banking system to help banks support the private sector, after consumer spending fell sharply in April due to virus containment measures.
Oil prices rise ahead of OPEC+ meeting on extended output cuts - Reuters
Oil prices rise ahead of OPEC+ meeting on extended output cuts - Reuters:
Oil prices rose on Tuesday, with traders waiting to see whether major producers agree to extend their huge output cuts to shore up prices at a virtual meeting expected later this week.
Brent crude LCOc1 futures rose 0.94%, or 36 cents, to $38.68 a barrel as of 0630 GMT.
West Texas Intermediate (WTI) crude CLc1 futures rose 0.73%, or 26 cents, to $35.70 a barrel.
Brent has doubled over the past six weeks, thanks to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, a grouping dubbed OPEC+.
Oil prices rose on Tuesday, with traders waiting to see whether major producers agree to extend their huge output cuts to shore up prices at a virtual meeting expected later this week.
Brent crude LCOc1 futures rose 0.94%, or 36 cents, to $38.68 a barrel as of 0630 GMT.
West Texas Intermediate (WTI) crude CLc1 futures rose 0.73%, or 26 cents, to $35.70 a barrel.
Brent has doubled over the past six weeks, thanks to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, a grouping dubbed OPEC+.