When Patrick Allman Ward decided last year to give up the security of a 30-year career with the oil major Shell for the chief executive's job at relative minnow Dana Gas, the Sharjah-based energy company, the lure was all about potential.
“It is a great growth story. There are clearly challenges in the short to medium terms, but we sit on an attractive portfolio in Egypt and Kurdistan, and for a company of our size, the growth potential is tremendous,” says Mr Allman Ward.
Since his appointment, he has been guiding the company, which listed on the Abu Dhabi Securities Exchange in 2005, through a series of challenges in its main markets. It is too early to say that all ahead will be plain sailing, but it looks as though there may be some light at the end of the tunnel.
Operating profits for 2013 were ahead thanks to higher production in Egypt and higher fuel sales in the Kurdish of Iraq, but the company’s main challenges continued to be how to get money out of those two countries, both of which — for different reasons — have been unable to pay Dana Gas in full.
Add in a long-running dispute with Iran over stalled gas supplies, and that means much of Mr Allman Ward's thoughts are on legal disputes, contract negotiations and arbitration talks, as much as the nitty gritty of energy production.
The most intractable challenge appears to be the situation with Iran. Dana came into being nine years ago to process Iranian gas supplies, but — for what Mr Allman Ward calls “a variety of reasons both technical and political within Iran” — those supplies never materialised.
Processing capacity in the Arabian Gulf and the UAE is completed and available to receive the gas supplies, he says. But he declines to give an estimate as to when they might be forthcoming. The whole delicate process has been further clouded by the complexities of Iran’s international situation in the light of US-led sanctions.
The next challenge takes in the minefield of Iraqi business politics. In 2007, Dana Gas pulled off what looked at the time like something of a coup by clinching a deal to exploit substantial energy reserves in booming Kurdish Iraq.
“We always intended to enter Kurdistan on a long-term basis to fully develop the fields potential. We are very proud of our achievements there. We have made investments of over $1 billion since 2008, representing the single largest investment by the petroleum sector in the region,” says Mr Allman Ward.
The company helped to build production facilities and a 180-kilometre pipeline to bring gas to two power stations that supply most of the region’s electricity needs.
Problems arose, however, when it became time for the company — via its 40 per cent stake in the company developing the resources, Pearl Petroleum — to receive payment for its efforts. “While we have received some money it is not the full amount we believe we are entitled to under the terms of our contract,” says Mr Allman Ward.
After four years of unsuccessful negotiation with the Kurdish authorities, last summer Dana Gas took the next steps in the dispute resolution process: mediation and arbitration under English law. “Obviously I can’t say very much about the details of the process due to legal constraints. However, we continue to want to reach an amicable settlement with the Kurdish ministry of natural resources that will protect the investors’ rights whilst recognising the legitimate needs and expectations of the people of Iraq and the region of Kurdistan,” Mr Allman Ward says diplomatically.
There have been suggestions in the energy industry that Dana Gas might be bought out of its Kurdish business by a bigger player in the energy sector, but no such offer has yet surfaced.
In Egypt, “there has been some better news at the end of last year,” he says. In the wake of Arab Spring, all players in the energy sector there have had difficulties getting payment from cash-strapped Egyptian authorities.
Last December, Dana Gas received $53 million from a government scheme to clear the backlog to foreign investors, bringing the total collections for the year to $134m. This was less than the value of invoices for the year, and the company is still owed $274m in receivables from Egypt.
“The government has always shown a willingness to respect the contracts and pay what they owe, but we also understand that the political and economic situation in Egypt is challenging. Discussions are cordial and positive and there is a recognition that we need to create a win-win solution that will allow Dana Gas to get paid for its production and to recover the outstanding receivables over an acceptable time frame,” Mr Allman Ward says.
Other facilities in Egypt show “considerable growth potential”, he adds.
Elsewhere, things are also looking up. The relatively small Zora gas project in the UAE will produce its first gas next year, he hopes.
Immediate financial difficulties were resolved last year with a deal with bondholders for the successful rollover of a sukuk. Dana Gas now has a five-year $850m sukuk obligation, half of which is convertible into company shares.
“With the rise in the share price we have received some requests for conversion of these convertible bonds to shares, which will of course help to reduce our debt burden,” he says.
fkane@thenational.ae
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Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
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Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
If you go
The flights
Emirates and Etihad fly direct to Nairobi, with fares starting from Dh1,695. The resort can be reached from Nairobi via a 35-minute flight from Wilson Airport or Jomo Kenyatta International Airport, or by road, which takes at least three hours.
The rooms
Rooms at Fairmont Mount Kenya range from Dh1,870 per night for a deluxe room to Dh11,000 per night for the William Holden Cottage.
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Name: Steppi
Founders: Joe Franklin and Milos Savic
Launched: February 2020
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Financing stage: Two seed rounds – the first sourced from angel investors and the founders' personal savings
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Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
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Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
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Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
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Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
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