Kuwait's Al Zour oil refinery. Kufpac is borrowing to expand its energy portfolio. Courtesy Amec Foster Wheeler
Kuwait's Al Zour oil refinery. Kufpac is borrowing to expand its energy portfolio. Courtesy Amec Foster Wheeler
Kuwait's Al Zour oil refinery. Kufpac is borrowing to expand its energy portfolio. Courtesy Amec Foster Wheeler
Kuwait's Al Zour oil refinery. Kufpac is borrowing to expand its energy portfolio. Courtesy Amec Foster Wheeler

Energy

Kuwait Foreign Petroleum Exploration Co to tap $1bn for oil and gas projects

Kuwait, fifth-biggest producer in Opec, has long planned to increase its global capacity to produce oil and gas

Bloomberg

July 31, 2018

  • English
  • Arabic

Kuwait Foreign Petroleum Exploration Co (Kufpec) is borrowing $1.1 billion to spend on oil and natural gas projects as the company plans to expand its shale operations, chief executive Sheikh Nawaf Saud Al Sabah said.

Sumitomo Mitsui Banking and Societe Generale were the joint lead arrangers of the five-year loan for Kufpec, a unit of state-run Kuwait Petroleum Corp (KPC), Mr Al Sabah said in Kuwait City. The new financing includes a two-year grace period and is in addition to $3.5bn that Kufpec has borrowed from banks since 2013. The company will finish repaying the $3.5bn next year, he said.

Kuwait, fifth-biggest producer in Opec, has long planned to increase its global capacity to produce oil and gas. The nation currently can pump as much as 3.15 million barrels a day of crude from its wholly owned fields, and KPC targets a daily capacity of 4 million by 2020 and 4.75 million by 2040.

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Kufpec, which currently produces 100,000 barrels of oil equivalent per day, expects to pump 119,000 next month and 150,000 in 2020, a level it will maintain until 2040, it said. The company’s plan coincides with Opec’s campaign, together with allied producers such as Russia, to pump more oil to offset supply disruptions in Venezuela and Libya and anticipated losses from Iran due to looming US sanctions.

Achieving Kufpec’s foreign production target has been a multinational effort. The company is producing 38,000 barrels of oil equivalent a day in Australia and 30,000 in Norway, and it has drilled 120 wells to produce gas and condensates at shale fields in Canada’s Alberta province. Kufpec is currently producing 8,000 barrels of oil equivalent a day in Canada and plans to gradually increase output there by drilling a total of 2,000 wells, Mr Al Sabah said.

The company’s total reserves comprise 494 million barrels of oil equivalent, and the Canadian project will add 28 million to that, he said. Kufpec is also considering investing in US shale deposits but is waiting for a more attractive price.

“Finding a strategic partner is not a problem for us, and there are many opportunities there, but the current valuations are too high for us,” Mr Al Sabah said.

Temple numbers

Expected completion: 2022

Height: 24 meters

Ground floor banquet hall: 370 square metres to accommodate about 750 people

Ground floor multipurpose hall: 92 square metres for up to 200 people

First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time

First floor terrace areas: 2,30 square metres  

Temple will be spread over 6,900 square metres

Structure includes two basements, ground and first floor 

Game Of Thrones Season Seven: A Bluffers Guide

Want to sound on message about the biggest show on television without actually watching it? Best not to get locked into the labyrinthine tales of revenge and royalty: as Isaac Hempstead Wright put it, all you really need to know from now on is that there’s going to be a huge fight between humans and the armies of undead White Walkers.

The season ended with a dragon captured by the Night King blowing apart the huge wall of ice that separates the human world from its less appealing counterpart. Not that some of the humans in Westeros have been particularly appealing, either.

Anyway, the White Walkers are now free to cause any kind of havoc they wish, and as Liam Cunningham told us: “Westeros may be zombie land after the Night King has finished.” If the various human factions don’t put aside their differences in season 8, we could be looking at The Walking Dead: The Medieval Years. 

 

Quick pearls of wisdom

Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”

Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.” 

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UAE currency: the story behind the money in your pockets

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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