Italian energy firm Eni to drill more for gas deposits off Cyprus coast

Eni has received drilling licenses in six areas, or blocks, south of Cyprus. (AP)
Updated 25 April 2018
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Italian energy firm Eni to drill more for gas deposits off Cyprus coast

NICOSIA, Cyprus: Eni will proceed with more exploratory drilling south of Cyprus over the next 20 months, affirming a “strong engagement and commitment” in a hydrocarbons search off the east Mediterranean island nation, the Italian company’s chief executive said Wednesday.
Claudio Descalzi said that Eni has already invested around €700 million in that search off Cyprus and will carry on exploration until more gas deposits are discovered.
“Clearly in 2018 and 2019 we are going to drill wells and make studies,” Descalzi said after talks with the Cypriot president. “There is a good cooperation and there is a good alliance...with the government and we share the same objectives.”
Eni has already discovered a gas deposit southwest of Cyprus. Descalzi said an appraisal well will need to be drilled to determine the deposit’s size.
He said Eni won’t stop its search for gas in the areas where it has received a license to drill, despite Turkey’s opposition to it.
Eni has received drilling licenses in six areas, or blocks, south of Cyprus. In three of those blocks, it has joined with South Korean company Kogas and in two it has partnered up with France’s Total.
In February, Turkish warships blocked a drillship from reaching a target southeast of Cyprus where Eni was scheduled to drill.
Turkey strongly opposes the gas search because it sees it as a “unilateral” action by the ethnically split island’s Greek Cypriots that ignores the rights of breakaway Turkish Cypriots to the island’s mineral wealth.
Cyprus was divided in 1974 when Turkey invaded after a coup by supporters of union with Greece.
The Cypriot government says the gas search is its sovereign right and that Turkish Cypriots will get their fair share of any potential proceeds after reunification.
Cyprus Energy Minister Yiorgos Lakkotrypis said ExxonMobil and partners Qatar Petroleum are due to carry out exploratory drilling in the second half of this year.
A deposit discovered by Texas-based Noble Energy in 2011 is estimated to contain more than 4 trillion cubic feet of gas.


SABIC prepares to meet investors to offer bond

Updated 25 September 2018
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SABIC prepares to meet investors to offer bond

  • The Kingdom’s petrochemical giant will be meeting investors in London, New York, Los Angeles and Boston from Sept. 25
  • SABIC has also confirmed the appointment of BNP Paribas and Citigroup as global coordinators on the sale

LONDON: Saudi Basic Industries Corp. (SABIC) is preparing to offer its dollar-denominated unsecured bond to the global market with investor meetings due to start this week.
The Kingdom’s petrochemical giant will be meeting investors in London, New York, Los Angeles and Boston from Sept. 25, according to a filing on the Saudi stock exchange on Tuesday.
The Saudi company is likely to be keen to tap into the heightened international interest in the Kingdom’s financial markets following the lifting of some restrictions on foreign investors’ activities at the start of the year.
SABIC has also confirmed the appointment of BNP Paribas and Citigroup as global coordinators on the sale, alongside HSBC Bank, Mitsubishi UFG Securities EMEA and Standard Chartered Bank acting as joint lead managers, in its Tadawul note.
The proposed issuance has been well-received so far by analysts with ratings agency Moody’s Investor Service assigning an ‘A1’ rating to the proposed senior unsecured notes to be issued by the financial vehicle, referred to as SABIC Capital II, and guaranteed by SABIC itself.
“SABIC’s A1 rating reflects its strong business position in the chemical sector and its ability to weather industry volatility, particularly given its healthy operational cash flows and conservative liquidity profile,” said Rehan Akbar, a senior analyst at Moody’s, in a note on Monday.

 

The bond is anticipated to be used in part to refinance an existing SR11.3 billion ($3 billion) one-year bridge loan raised in January this year to fund the company’s 24.99 percent stake in the Swiss chemical company Clariant, according to the Moody’s note. All regulatory requirements were completed on this acquisition earlier this month.
Cash proceeds from the bond may also be used to repay a $1 billion bond due on Oct. 3, according to Moody’s.
On Tuesday SABIC confirmed that the bond will be used mainly to refinance “outstanding financial obligations” of the company and its subsidiaries.
Analysts at rating agency S&P Global were also upbeat about SABIC’s outlook, with research published on Monday stating that the company has “strong profitability” via its KSA operations and a “strong” liquidity position.
“The debt issuance is helpful for the credit profile in the sense that it extends the company’s debt maturity profile and strengthens its liquidity position,” said Tommy Trask, corporate and infrastructure credit analyst at S&P Global.
The agency currently assigns the petrochemical firm an ‘A Minus’ rating, with a “stable outlook,” which it said reflects its “view on the sovereign as well as its expectations that SABIC will maintain high profitability under current benign industry conditions.”
S&P Global’s report said margins in the global chemical industry will “largely stabilize in 2018 following several years of improvement, attributable to the increase in commodity chemical capacity.”
However, it also warned that a key risk to credit quality is
the trend for mergers and acquisitions within the sector and the “potential negative impact on credit metrics from funding them with debt.”

FACTOID

SABIC operates in more than 50 countries across the world.