1. Art and Diseño

MONDAY, FEBRUARY 2, 2015
BUSINESS
Aramco stops Red Sea
deepwater exploration
KHOBAR: State oil giant Saudi Aramco
has put on hold its deepwater oil and gas
exploration and drilling activities in the
Red Sea because of high costs as it economizes in an environment of low crude
prices, industry sources said yesterday.
The cost of operations in the Red Sea, a
new area for Saudi Aramco, was around
$1 million per day, said two sources, who
declined to be identified because they
were not authorized to speak to media.
“It is related to budget cost reduction
in the Red Sea offshore,” said one of the
sources. Saudi Aramco declined to comment. The company’s chief executive
Khalid Al-Falih said last week that Saudi
Aramco would renegotiate some contracts and postpone some projects
because of the plunge in oil prices over
recent months. The firm has suspended
plans to build a $2 billion clean fuels
plant at its largest oil refinery in Ras
Tanura, sources told Reuters last month.
However, Falih also said Saudi Aramco
would continue investing in key projects,
and had earmarked $7 billion to spend
on unconventional gas in coming years
after investing $3 billion in the past. A
second source said deepwater exploration in the Red Sea had stopped
because of several factors, including
environmental issues, costs, and the
need for further studies to minimize risks.
“One of the most expensive offshore
(areas) happens to be in the Red Sea the depth is different from the Gulf coast.
They did discover a lot of oil and gas but
they need to do lots of tests. Now with
the current prices, they have put it on
hold until further notice to collect more
data,” said a third source.
Saudi Aramco said in its 2013 annual
review that it was continuing operations
in the Red Sea’s deep waters and had
made a new oilfield discovery at AlHaryd. “It would not be surprising if Saudi
Aramco were to suspend exploration in
the Red Sea because it is a very complex
basin, and no significant discoveries have
been announced since the Midyan field
complex and the Um Luj condensate discoveries accomplished by the Aramco
exploration team of the early 90s,” said
Sadad Al-Husseini, a former top executive
at Saudi Aramco and now an energy consultant. — Reuters
Waha Capital to invest
$870m cash bounty: CEO
ABU DHABI: Abu Dhabi investment firm
Waha Capital plans to invest 3.2 billion
dirhams ($872 million) in the short-term
to grow its energy, healthcare and infrastructure portfolio, its chief executive
said yesterday. Salem Rashid Al-Noaimi
spoke to Reuters after the firm posted an
88 percent increase in fourth-quarter net
profit to 142.1 million dirhams and a
more-than five-fold increase in annual
profit to 1.73 billion dirhams, bolstered
by deals around its investment in AerCap
Holdings.
AerCap Holdings, in which Waha was
the largest shareholder, bought
American International Group’s aircraft
leasing business in a $5.4 billion cash
and share deal that was completed in
May. This diluted its stake in the firm by
almost half but provided it with significant cash to deploy into new deals. Its
cash position was bolstered further in
December, when Waha hedged 12 million shares it owned in AerCap and sold a
further 3 million shares in the aircraft
leasing firm, giving it $532 million in
funding. “We would like to deploy our
firepower of 3.2 billion dirhams to grow
our energy, infrastructure, healthcare
and education projects,” Noaimi said,
adding some deals are close to finalizing.
He did not elaborate.
Waha would like to increase its stake
in Dubai’s National Petroleum Services
(NPS), having bought a 20.15 percent
stake last year for 274 million dirhams,
he said.
It was also interested in launching a
second infrastructure fund. It is currently
co-sponsor of the $300 million Mena
Infrastructure Fund, which is fully invested. Currently Waha holds a 12.6 percent
stake in AerCap and all its shares are fully hedged, Noaimi said, adding Waha
plans to stick to its hedging plan until
maturity over three years, after which it
has the option to hand back shares or
pay for them. Profit growth in 2015 may
not be “phenomenal as in 2014”, Noaimi
said, but in the next three to five years
“our ambition is to continue in the same
trajectory”. — Reuters
Greece on European charm
offensive for debt relief
Athens seeks to renegotiate $270bn bailout
PARIS: Greece’s new anti-austerity government was
set to kick off its European charm offensive in Paris
yesterday seeking to renegotiate its 240 billion euro
($270 billion) bailout, though Germany has already
refused to consider any debt relief.
Finance Minister Yanis Varoufakis, who is looking to
write down half of Greece’s debt, was scheduled to
meet with his French counterpart Michel Sapin and
Economy Minister Emmanuel Macron in the afternoon, before heading on to London and Rome.
Greece’s Prime Minister Alexis Tsipras has tried to calm
nerves and markets spooked by his radical plans, saying he did not intend to renege on commitments to
the European Union and International Monetary Fund.
“It has never been our intention to act unilaterally on
Greek debt,” Tsipras said in a statement to Bloomberg
News.
But he said Greece needed greater leeway to tackle root problems in its economy, such as tax evasion,
corruption and policies that favor only a wealthy few.
“We need time to breathe and create our own medium-term recovery program,” he said.
Varoufakis is likely to get a sympathetic hearing in
France, where Sapin has already said the EU should be
open to reworking Greece’s bailout program, while
emphasizing that it must still pay up eventually. “We
can discuss, we can postpone, we can alleviate-but we
will not cancel” Greek debt, Sapin told France’s CanalPlus television. The flurry of diplomacy has seen
Tsipras phone European Central Bank chief Mario
Draghi late Saturday and book meetings with Italian
Prime Minister Matteo Renzi, French President
Francois Hollande and European Commission
President Jean-Claude Juncker this week. Neither he
nor Varoufakis intend to visit Germany, which has
shouldered the bulk of Greece’s loans and which
strongly objects to Athens’ plans.
Germany holds firm
German Chancellor Angela Merkel on Saturday
ruled out fresh debt relief, telling the Hamburger
Abendblatt daily: “There has already been voluntary
debt forgiveness by private creditors, banks have
already slashed billions from Greece’s debt.” “I do not
envisage fresh debt cancellation,” she said. Portugal
and Finland also oppose debt relief. Despite a restructuring in 2012, Greece is still lumbered with debts of
more than 315 billion euros, upwards of 175 percent
of gross domestic product (GDP) — an EU record. But
in its first week in power, the government scrapped
the privatization of Greece’s two main ports and the
state power company and announced a major
increase in the minimum wage. Varoufakis says he no
longer wishes to deal with the EU-IMF negotiating
team based in Athens, saying they have no authority
to renegotiate the bailout conditions. “I don’t want to
waste their time,” he told the To Vima weekly.
A renowned left-wing blogger, Varoufakis argues
that the bailout merely throws good money after
bad-piling more debt on Greece to pay off old borrowing, rather than fixing the economy. “We are calling (the bailout) into question not just because it is
ATHENS: Tourists take a look of central Athens with the Acropolis hill (top) engulfed in African
dust carried by strong southerly winds as they stand on Lycabettus hill yesterday. A day after
Greece appeared on a collision course with its creditors, new radical left Prime Minister Alexis
Tsipras has tamped down the rhetoric by vowing to pay off debts and not act unilaterally. — AP
not good for Greece, but we consider that it is very
bad for all of Europe,” he said. Greece has been promised another 7.2 billion euros in funds from the EU,
IMF and European Central Bank (ECB), but this is
dependent on a review of reforms at the end of
February. Varoufakis has said his government does
not want the loans, but there are concerns that
Greece cannot survive without them, not least since
its banks are being propped up by the ECB.
The stunning success of Tsipras’ hard-left Syriza
party in last Sunday’s polls sent shockwaves through
the continent and has encouraged other anti-austerity
parties. At least 100,000 people took to the streets of
Madrid on Saturday in support of the Spanish party
Podemos, which has surged in polls ahead of elections late this year. — AFP
UAE’s Massar Solutions
postpones flotation
DUBAI: Abu Dhabi-based fleet manager Massar
Solutions has postponed its initial share sale after
the planned flotation failed to secure enough
investor backing during the subscription period, a
report by United Arab Emirates’ daily The National
said yesterday. Significantly less than half of the
shares in the 576 million dirham ($156.8 million)
initial public offering (IPO) were taken up by local
retail and institutional investors for whom they
were reserved, the paper reported, citing an advisory source familiar with the matter.
Massar’s listing is now being reviewed by the
advisors and the markets regulator, the Securities
and Commodities Authority (SCA), the report
added. The company was selling a 40 percent
stake provided by existing shareholders Invest AD,
a local financial firm, and Abu Dhabi National
Energy Co (TAQA) between Jan. 11 and 25. A
spokesman for Massar declined to comment
when contacted by Reuters. Should the postponement be confirmed, it will be a blow to the
Abu Dhabi bourse and other companies in the
UAE which were hoping to go public in the nearterm. Massar would have been the first listing in
Abu Dhabi since 2011, as investor sentiment suffered in the wake of the financial crisis but was
improving after rebounds in UAE markets since
2013. —Reuters