Chevron says output from joint oil field remains shut
Chevron says output from joint oil field remains shut
The Wafra field was shut for maintenance on May 11 for two weeks in a move apparently aimed at giving the Gulf OPEC allies time to solve a longstanding dispute.
Last month, Saudi Chevron told its partner, Kuwait Gulf Oil Company, that it planned to shut down Wafra after failing to resolve various disputes with Kuwait, mainly related to the right to operate, according to industry sources.
Chevron has said it has faced problems obtaining supplies and work permits for its expatriate staff, which could hurt production in the Neutral Zone.
“Current difficulties in securing work permits and materials have impacted the company’s operations,î Chevron spokeswoman Sally Jones said in a statement on Wednesday.
Chevron operates the Wafra onshore oilfield on behalf of Saudi Arabia.
“While efforts continue with all appropriate parties to resolve the issue, Saudi Arabian Chevron and Kuwait Gulf Oil Company have stopped production at the onshore Partitioned Zone. Production will remain shut in until the situation is resolved,” Jones said.
Production from the onshore fields in the Neutral Zone between Saudi Arabia and Kuwait was about 190,000 barrels per day, a Kuwaiti industry source has said.
The Neutral Zone is the only place in Saudi Arabia and Kuwait where foreign oil firms have equity in fields, which are otherwise owned and operated by state oil companies. Crude output is divided equally between the two countries.
It survived the nationalization of the Saudi oil industry in the 1970s. Since then, Saudi reserves of 264 billion barrels, about a fifth of the world’s proven oil reserves, have been off limits to international oil companies.
Industry sources say Kuwait was angry because it was not consulted when the Chevron concession to operate Wafra was renewed by Riyadh in 2009 until 2039.
But the row goes back further to 2007, when a land dispute between Kuwait and Saudi Arabia led to a delay in Kuwait’s plans to build an oil refinery.
Chevron holds a lease on some of the land on Kuwait’s side which was earmarked for the new refinery.
“I don’t think you will see any change of the status quo until the end of the third quarter, people from Chevron will keep leaving the country because of the expiration of their visas,” said an industry source in Kuwait.
The shutdown of Wafra, which has an output capacity of about 220,000 bpd of Arabian Heavy crude, comes after the oil output from another jointly operated field, Khafji, was stopped in October to comply with environmental regulations.
UAE regulators ask corporates to declare exposure to Abraaj
- Air Arabia admits $336 million exposure to Abraaj funds.
- Abraaj sells its Latam, Sub-Saharan Africa, North Africa and Turkey Funds to Colony Capital.
DUBAI: The United Arab Emirates’ top securities regulator has asked UAE-listed companies to declare their exposure to Dubai-based private equity firm Abraaj, which filed for provisional liquidation last week.
The Securities & Commodities Authority sent a letter earlier this week and companies had until Thursday to submit their responses, Obaid Al-Zaabi, chief executive of the regulator, told Reuters.
Air Arabia, a Dubai-listed low-cost carrier, said this week that it had a $336 million exposure to Abraaj, which is the Middle East’s biggest private equity firm. Shares in the airline plunged because of these links.
Al-Zaabi said some companies in the UAE had exposure to Abraaj, without naming them.
A court in the Cayman Islands, where Abraaj Holdings is registered, ordered this week that PwC be appointed as provisional liquidators of the company and Deloitte as liquidators of Abraaj Investment Management Ltd.
Abraaj said that the latest restructuring agreement has received in-principle regulatory approval and is expected to close upon approval from the Cayman Islands court and other customary consents.
On Thursday, the Dubai Financial Services Authority (DFSA), which is the regulator of the Dubai International Financial Center (DIFC), said it would discuss “various matters” with the liquidators and “will continue to work toward safeguarding the interests of investors.”
The DFSA is involved because Abraaj has an entity regulated in DIFC.
Abraaj Group agreed to sell its Latin America, Sub-Saharan Africa, North Africa and Turkey Funds management business to US investment management firm Colony Capital Inc, the companies said on Thursday.
The sale agreement comes after months of turmoil at Abraaj in the wake of its dispute with four of its investors, including the Bill & Melinda Gates Foundation and International Finance Corp. (IFC), over the use of their money in a $1 billion health care fund. The group has denied it misused the funds.
The sale is part of a provisional liquidation and restructuring as set out in a court order. Financial terms of the deal were not disclosed.
Colony Capital has also agreed to oversee, on an interim basis, other Abraaj group funds that are not being acquired so that the group and all its stakeholders have a “comprehensive global solution in place,” the companies said.
The other group funds include the $1 billion health care fund, and some legacy funds of the private equity group.
Sources told Reuters earlier that US buyout firm TPG was in talks with investors in Abraaj’s health care fund to take over management of the assets of the $1 billion fund.
The K-Electric asset, which is being sold in Pakistan and is owned by Abraaj Holdings, is also not part of the transaction.
Colony’s deal comes after other investors such as Cerberus Capital Management had also made offers for the Abraaj business before it filed for provisional liquidation in the Cayman Islands.
A unit of Abu Dhabi Financial Group earlier this week made a conditional offer to buy Abraaj’s management interest in all of its limited partnerships for $50 million, according to a document seen by Reuters.
Since Abraaj’s row with some investors became public early this year, it split its investment management business and holding company, while its founder Arif Naqvi stepped aside from the day-to-day running of its private equity fund unit and the firm halted its investment activities.
Tom Barrack, executive chairman of Colony Capital, said that he hoped that the transaction would enable the process of rebuilding on all sides and also bring an end to the speculation that has swirled around Abraaj over the past months.