Iraq nears oil output capacity, committed to OPEC cuts

Iraqi Oil Minister Jabar Al-Luaibi. (Reuters)
Updated 14 January 2018
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Iraq nears oil output capacity, committed to OPEC cuts

ABU DHABI: Iraqi Oil Minister Jabar Al-Luaibi said on Saturday that the OPEC member’s oil output capacity is nearing 5 million barrels per day, but the country will remain in full compliance with its output target under a global pact to cut supplies.
Al-Luaibi said the supply cut agreement between OPEC and non-OPEC producers should continue despite a rise in oil prices.
“The market now is not 100 percent stable,” he said at an industry conference in Abu Dhabi, adding that current oil prices could be sustained, but there might be some fluctuations.
For the week, Brent crude rose 3.3 percent, while US West Texas Intermediate (WTI) crude jumped 4.7 percent, having hit its strongest since late 2014 at $64.77 on Thursday.
The deal between the Organization of the Petroleum Exporting Countries and Russia to cut 1.8 million barrels per day of crude, which started in January 2017, is due to last until the end of 2018.
Al-Luaibi said Iraq’s current oil production is about 4.3 million barrels per day.
Despite the increase in oil production from the US, “so far there is a balance” in the oil market, Al-Luaibi said.
“We are watching the market and the market is okay in terms of supply and demand balance. There’s still a gap, inventories are still high. The inventory level will decrease gradually and we will see how things will go,” he told reporters.
Al-Luaibi also said that his ministry plans to conclude three contracts with international gas companies by mid-2018 to utilize gas from Basra, Maysan and Nassiriyah southern provinces.
He said that by 2021, the country plans to “reach zero gas flaring.”
Iraq is forced to flare some of the gas produced alongside crude oil as it lacks the facilities needed to capture and process it into usable fuel.
The country has just one gas processing company, the Basrah Gas Company, a joint venture between Iraq’s state-run South Gas Co., Shell and Mitsubishi.
OPEC’s second-largest crude producer after Saudi Arabia, Iraq is seeking to increase its oil and gas income, which account for nearly all its public budget.


UAE regulators ask corporates to declare exposure to Abraaj

Updated 10 min 1 sec ago
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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.