Strong interest as UAE oil giant lists retail arm

ADNOC Distribution is the sole retail fuel operator in Abu Dhabi and Sharjah. (Reuters)
Updated 14 December 2017
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Strong interest as UAE oil giant lists retail arm

ABU DHABI: Investor interest was strong Wednesday as Abu Dhabi’s state energy company listed a stake in its retail distribution arm, the first time the emirate has sold shares in one of its oil firms.
The Abu Dhabi National Oil Company said it had raised $845 million by floating 10 percent of its subsidiary ADNOC Distribution, a landmark share offering as Gulf energy firms open up to outside investments.
The initial public offering price for the shares was at 2.5 dirhams (68 US cents) and by 9:15 a.m. GMT they were trading at 73 cents.
ADNOC said the IPO brought the subsidiary’s market capitalization to $8.5 billion, making it the fourth-largest firm on the Abu Dhabi Securities Exchange.
The statement said the IPO was oversubscribed several times and that 90 percent of the shares were sold to institutional investors, a third of them international, and the rest to individual investors.
Abu Dhabi, the UAE capital which holds more than 90 percent of the country’s 98 billion barrels of crude reserves, has never before offered public shares in one of its oil companies.
Hit hard by the sharp drop in oil prices, energy-dependent Gulf states have resorted to a string of reforms including hiking fuel and power prices, imposing taxes and selling off part of their strategic assets to raise funds.
Neighboring oil kingpin Saudi Arabia is planning to eventually float up to 5 percent of its national oil company Aramco, in what many expect would be the biggest IPO in history.
With 360 fuel stations and more than 235 stores, ADNOC Distribution is the UAE’s largest operator of petrol stations and the sole retail fuel operator in the emirates of Abu Dhabi and Sharjah.
“We were extremely pleased with the demand for this landmark IPO. We received substantial interest from the international investment community, as well as an overwhelming response from investors in the UAE,” ADNOC CEO Sultan Al-Jaber said in the statement.
Established in 1973, ADNOC Distribution posted net profits of $485 million in 2016.
ADNOC has recently renewed concession rights and offered new joint ventures to a number of international oil companies as it bids to raise UAE output to 3.5 million barrels per day next year, from the current 3.2 million bpd.
 


Young Iraqis use innovation to make a living in oil-rich south

Updated 18 June 2018
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Young Iraqis use innovation to make a living in oil-rich south

  • The job market for Iraqi youths has become starkly different in the post-Saddam Hussein era
  • In the decade which followed the US invasion and the dictator’s ouster in 2003, authorities continued to increase state hirings — with a heavy dose of nepotism

BASRA: From a roving cafe to scrap metal sculptures, young Iraqis unable to tap into the country’s oil wealth are having to find creative ways to make a living.
While their parents generally went straight into public sector jobs after graduation, the job market for Iraqi youths has become starkly different in the post-Saddam Hussein era.
In the decade which followed the US invasion and the dictator’s ouster in 2003, authorities continued to increase state hirings — with a heavy dose of nepotism.
But now, as 26-year-old Karrar Alaa discovered, there are no more guarantees.
Three years ago, he was counting on his business degree leading to a public sector job in the southern port city of Basra.
But tired of waiting, he has turned entrepreneur.
After gathering up all of his savings and borrowing money from relatives, Alaa invested in a car and transformed it into a coffee shop on wheels.
“It’s the first of its kind in Basra. I got the idea from a video shot in Europe and posted on Facebook,” he told AFP.
The “Coffee 2 Go” car has a giant plastic cup mounted on the roof, while an image of a cup of cappuccino and coffee beans is emblazoned on the body.
An initial investment of $20,000 has led to daily earnings of around 150,000 dinars, or $120, from cups of coffee made in a machine installed in the car boot.
Mashreq Jabbar earns similar sums from his little bookshop squeezed into a corridor of a Basra fashion mall.
“Renting a shop costs $6,000 a month; I only pay $2,500 for my hallway,” said the slim 26-year-old, as he tidied shelves of school books, romantic novels and poetry collections.
The geology graduate had also hoped to get a job as a public official, confident that his degree would make him employable in the local oil industry.
But even though the sector accounts for 89 percent of the state budget and 99 percent of Iraq’s export revenues, it provides only one percent of jobs as the majority of posts are filled by foreigners.
The lack of opportunities is nationwide; from the capital Baghdad to second city Mosul in the north, and from the agricultural east to the western desert.
It is not uncommon to find engineers working as taxi drivers, or sandwich stalls manned by literature graduates in a country of avid readers.
Officially, 10.8 percent of Iraqis are jobless, while youth unemployment is twice as high in a country where 60 percent of the population are aged under 24.
A mushrooming number of private universities — with Baghdad boasting around 30 — has made the situation even worse among graduates.
The private sector which emerged after Saddam’s rule has failed to fill the employment gap, with many young Iraqis holding out for the coveted public sector posts.
“The common view is that there’s no choice but to work in the public sector,” said Ahmed Abdel Hassan, an economics professor at the University of Basra.
“Young people who go to work in the private sector say it’s a temporary move before getting a post in the public sector,” he said.
Even Basra’s entrepreneurs see the benefits, with Alaa noting the social security and pension perks, while Jabbar pointed to civil servants’ guaranteed salaries.
Many of those holding out for a state job, however, are left unable to move out of their parents’ house.
Omar Abdallah, 28, had pinned his hopes on getting a teaching job at the end of his studies in fine art.
Iraq once had a high-quality and free education system, but that was left in tatters following the international embargo of the 1990s after Saddam’s invasion of Kuwait.
Having failed to land a job and with no capital to start a business of his own, Abdallah began collecting scrap metal.
“I could only count on myself and my talent,” he said at his family home, where one room serves as both his workshop and exhibition space.
Abdallah has transformed old bicycle chains into scorpions, cutlery into dragonflies and used nuts and bolts to make motorbike models.
In a good month he can sell half a dozen sculptures, charging between $200 and $250 apiece.
“People love my sculptures,” he said proudly. “They tell me: ‘How did you manage to make something so beautiful out of rubbish?’“