Dana Gas sells onshore Egyptian assets for $236 million

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Updated 26 October 2020

Dana Gas sells onshore Egyptian assets for $236 million

  • CNBC reported that Dana Gas UAE will actively attempt to maximize the value of these remaining assets

CAIRO: Dana Gas PJSC has entered into a binding agreement with IPR Wastani Petroleum Ltd. for the sale of its onshore Egyptian oil and gas assets for up to $236 million, including contingent payments.

As part of the transaction, Dana Gas is selling its full operative shares in its four onshore concession areas of El Manzala, West El Manzala, West El Qantara and North El Salhiya, and their associated development licenses.

The production rate in the four concession areas amounted to 30,950 barrels of oil equivalent per day in the first half of 2020. It contributed $38 million before interests, taxes, consumption, and depletion to the company’s profits during the same period. Transfer of ownership, responsibilities and staff will take place upon finalization and formal approval of deeds.

The UAE company, through its wholly owned subsidiary Dana Gas Egypt, will retain its interests in its onshore exploration concession in El Matariya and offshore exploration concession in North El Arish.

CNBC reported that Dana Gas UAE will actively attempt to maximize the value of these remaining assets.

The sale comprises of a base cash consideration of $153 million, including networking capital associated with sold assets and before any price closing adjustments, and contingent payments of up to $83 million subject to average brent crude prices and production performance between 2020 and 2023.

Dana Gas is also set to obtain a number of potential trade opportunities linked to other parties. The base consideration will be adjusted according to collections received and payments made by the company during the transitional period between the effective date and closing date.

The transaction is subject to several prerequisites. It also requires the approval of the Egyptian Ministry of Petroleum and Mineral Resources. It is expected to be finalized by the beginning of next year. The financial return of the transaction will likely be allocated towards paying company debts and public institutional benefits.

Dana Gas CEO Dr. Patrick Allman-Ward said: “Our constant aim is to achieve the highest return for our shareholders.”

The new deal is a key part of the company’s ambitions, he added. Finalizing the transaction will boost the UAE giant’s financial status, allowing it to transition towards developing its assets in Iraq’s Kurdistan region.

Kurdistan contains huge reserves of oil and hydrocarbon resources that will be explored and developed in the future.

The remaining Egyptian assets will remain productive, with the offshore exploration sector in particular likely to see huge growth in the future.

IPR is a leading company in the field of gas exploration and production in Egypt with over nine concession areas and more than 30 years of experience.

SAMA to become Saudi Central Bank, with full independence

Updated 25 November 2020

SAMA to become Saudi Central Bank, with full independence

  • New central bank to be linked directly to king but its president independent of government
  • Bank’s core responsibilities to maintain monetary reserves, boost confidence, trust in financial sector

RIYADH: The Council of Ministers on Tuesday approved a new law which includes changing the name of the Saudi Arabian Monetary Authority (SAMA) to the Saudi Central Bank.

Under the legislation, the new Saudi Central Bank will be linked directly to the monarch and will enjoy full financial and managerial independence.

The Saudi Central Bank Law set out three core objectives for the new institution namely, to maintain cash stability, boost confidence and trust in the financial sector, and support economic growth.

The new legislation states that the central bank is responsible for setting and managing monetary policy and it outlines the relationship between the bank, the government, and other international important organizations and bodies. It also sets a framework to govern the bank’s operations and decisions.

Fadhel Al-Buainain, an economic expert and member of the Shoura Council, said one of the important aspects of the Saudi Central Bank Law was that it was linked directly to the king.

“This enhances its full independence with respect to setting the monetary policy and the bank’s relationship with the government and global organizations,” he added.

The law states that the abbreviation SAMA, which was established in 1952, would remain unchanged due to its historical importance domestically and internationally.

“The fact that the bank will keep the SAMA abbreviation unchanged is important and reflects a wise decision because the abbreviation is widely-known,” Al-Buainain said.

While the SAMA acronym will remain, Hassan Alwatban, an economic consultant, outlined the differences between the monetary authority and the central bank.

For the central bank to perform its duties properly, he said it needed to be fully independent when it came to decision-making, especially decisions related to managing state funds.

Another difference was that the president of the central bank would not be under the state’s authority and their nomination would be made by a legislative authority. The government or state could not appoint or remove the president except by the most supreme judiciary authority.

Thirdly, he added, a government agency could not interfere in the bank’s affairs because the bank enjoyed full monetary power.

Alwatban told Arab News: “Therefore, changing the monetary authority to a central bank is healthy for the national economy.

“The tasks of the Ministry of Finance, which is responsible for financial policies, will be set apart from the tasks of the central bank, which is responsible for setting the monetary policies. Before the change, the tasks of the Ministry of Finance and SAMA overlapped.

“Besides, the Ministry of Finance was in charge of the financial policy and the monetary policy at the same time, a fact that made SAMA focus on serving the banks’ interests more than focusing on serving the interests of citizens,” he added.