Nomura Middle East head: Saudi-Japan business links to move beyond oil

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Updated 14 January 2020

Nomura Middle East head: Saudi-Japan business links to move beyond oil

  • Makoto Kinone talks to Arab News during Japanese Prime Minister Abe’s visit to the Gulf
  • He views the region as a place to do business and strengthen the relationship between Japan and Saudi Arabia

DUBAI: Makoto Kinone is head of the main Middle East investment banking operations for Nomura International, the foreign arm of one of Japan’s biggest and oldest banks.
Nomura has been involved in the region — mainly Saudi Arabia, the UAE and Bahrain — for several decades, and has advised clients on billions of dollars of trade finance and corporate transactions. It also has a big asset management business in the region.
On the eve of the visit by Japanese Prime Minister Shinzo Abe to the Gulf, Kinone told Arab News how he views the region as a place to do business, and the strengthening relationship between Japan and Saudi Arabia.

Q: Explain the background to Nomura’s presence in the Middle East. What projects have you been involved in here, in Saudi Arabia, in particular?
A: With a presence in the Middle East region since 1974, Nomura has long-standing relationships with Saudi government bodies, financial institutions and corporates.
Nomura was licensed as an investment bank by the Capital Market Authority in May 2008 and began operations in July 2009, becoming the first Asian firm authorized to provide investment banking services in the Kingdom.
Nomura Saudi Arabia is focused on arranging and advising in securities, and has delivered a number of customised solutions to clients.
Most recently, Nomura acted as sole financial adviser to one of the largest petrochemical companies in the Kingdom, on a sell-side transaction in the mergers and acquisitions field.

Q: What do you see as the synergies between Japan and Saudi Arabia from a business and financial point of view?
A: Culturally, Japan and Saudi Arabia have some commonalities — the value of long-term relationships, the need for balance and careful deliberation in decision making. This translates into the business and financial world where there has been stable growth in trade and economic agreements between the two countries.

Q: Japan is a big importer of crude oil from the Kingdom, but does this relationship extend beyond the oil trade?
A: Although the current business relationship is dominated by energy-related trade, there has been a focus on finding ways to promote a balanced relationship (cooperation in areas such as technology, general industry, security and finance) that is mutually beneficial to both countries.

Q: What is Nomura’s assessment of the current economic situation in Japan?
A: Japan continues to face domestic and international headwinds. An aging population at home, as well as a cyclical global economic slowdown and international political uncertainty, has made an impact.
That said, macro-fundamentals show that Japan’s cyclical slowdown, which has continued since 2018, is coming to an end. Domestic economic growth is expected to start gathering pace, but not until the end of this year.
 


Big oil feels the heat on climate as industry leader promises: ‘We will be different’

Updated 22 January 2020

Big oil feels the heat on climate as industry leader promises: ‘We will be different’

  • Trump singles out ‘prophets of doom’ for attack
  • Greenpeace told the Davos gathering that the world’s largest banks, funds and insurance companies had invested $1.4 trillion in fossil fuel companies since the Paris climate deal

LONDON: Teenage environmental activist Greta Thunberg slammed inaction over climate change as the global oil industry found itself under intense scrutiny on the opening day of the World Economic Forum in Davos.

The teenage campaigner went head to head with US President Donald Trump, who dismissed climate “prophets of doom” in his speech.
She in turn shrugged off the US president’s pledge to join the economic forum’s initiative to plant 1 trillion trees to help capture carbon dioxide.
“Planting trees is good, of course, but it’s nowhere near enough,” Thunberg said. “It cannot replace mitigation. We need to start listening to the science and treat this crisis with the importance it deserves,” the 17-year-old said.
The 50th meeting of the World Economic Forum was dominated by the global threat posed by climate change and the carbon economy.
The environmental focus of Davos 2020 caps a year when carbon emissions from fossil fuels hit a record high, and the devastating effects of bushfires in Australia and other climate disasters dominated the news.
Oil company executives from the Gulf and elsewhere are in the spotlight at this year’s Davos meeting as they come under increased pressure to demonstrate how they are reducing their carbon footprint.
“We are not only fighting for our industry’s life but fighting for people to understand the things that we are doing,” said Vicki Hollub, CEO of Occidental, the US-based oil giant with extensive oil operations in the Gulf. “As an industry when we could be different — we will be different.”

‘Planting trees is good, but nowhere near enough,’ activist Greta Thunberg told Davos. (Shutterstock)

She said the company was getting close to being able to sequester significant volumes of CO2 in the US Permian Basin, the heartland of the American shale oil industry which is increasingly in competition with the conventional oil producers of the Arabian Gulf.
“The Permian Basin has the capacity to store 150 gigatons of CO2. That would be 28 years of emissions in the US. That’s the prize for us and that’s the opportunity. People say if you’re sequestering in an oil reservoir then you are producing more oil, but the reality is that it takes more CO2 to inject into a reservoir than the barrel of oil that it makes come out,” Hollub said.
The challenge Occidental and other oil companies face is to make investors understand what is happening in this area of carbon sequesteration, she added.
The investment community at Davos is also looking hard at the oil industry in the face of mounting investor concerns.
Greenpeace told the Davos gathering that the world’s largest banks, funds and insurance companies had invested $1.4 trillion in fossil fuel companies since the Paris climate deal. It accused some of these groups of failing to live up to the World Economic Forum goal of “improving the state of the world.”