Newsletter 100 Issue December (Copy 93)

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Country Risk Update - Kuwait

Risk Indicator - DB4b
Risk Level - Moderate
Ratings Trend - Stable

A pending resolution of the Divided Zone dispute with Saudi Arabia will boost Kuwait's oil production capacity. Contract awards suggest that Divided Zone oil production will restart in 2019: this would tie in with the end of OPEC-led production cuts.
Market Overview
Oman Oil Company Sells 10% Stake In Giant Khazzan Gas Field To Malaysia’s Petronas
Oman Oil Company for Exploration & Production said that it has signed an agreement to sell 10% stake from the total value of Block 61 Khazzan gas field – for an undisclosed amount – to PC Oman Ventures, a wholly owned subsidiary of Malaysia’s state oil company Petronas. OOCEP is a wholly owned subsidiary of Oman Oil Company, itself 100% owned by the Government of the Sultanate of Oman. The company currently holds a 40% stake in Block 61 through its subsidiary, Makarim Gas Development LLC. The operator BP Oman bears the remaining 60%. According to a statement from OOCEP on Twitter, The completion of the transaction is subject to approval from the Sultanate of Oman’s government and other closing conditions that the company didn’t disclose. Following the deal, OOCEP will retain 30%, with 10% to Petronas while BP holds 60%. The production of the giant Khazzan gas field has begun in September 2017, with phase one delivers 1 billion cubic feet of gas per day to Sultanate of Oman and on track for future expansion to 1.5 billion cubic feet of gas per day.
UAE banking mergers 'positive' for future of the sector
Consolidation among UAE-based banks is continuing as the country looks to reshape its economy and consolidate state-owned companies to deal with lower oil prices, according to a new research note. Indosuez Wealth Management’s Credit Pulse report follows news that three Abu Dhabi banks - Abu Dhabi Commercial Bank, Union National Bank, and Al Hilal Bank - were in possible merger talks while three Sharjah banks - Bank of Sharjah, Invest Bank, and United Arab Bank - publicly denied media reports of another three-way merger. Senior credit analyst Aabid Hanif said: "Taking into account the UAE market, the consolidation trend is fundamentally positive and will improve banks’ franchises through increased pricing power as well as lowering funding costs for banks. "However, existing weaknesses, namely sizeable single name and sector concentrations, high levels of related-party lending, and asset-quality issues are still characteristics of banking in the Middle East and remain key features for creditors to look out for. It added that lower economic and credit growth has increased competition for lending opportunities as the pool of high-quality customers and deposit sources shrinks. Both these dynamics have put pressure on UAE banks’ net interest margins which have trended downwards, supporting the case for mergers."
UAE's Al Dahra signs $172m deal for Serbian farming assets
UAE-based conglomerate Al Dahra, which specializes in the agribusiness sector, has signed an agreement to acquire the assets of PKB Korporacija and its subsidiaries in Serbia for EUR150 million ($172.5 million). The acquisition is being undertaken as a result of Serbia’s objective to privatize PKB Korporacija, and follows a public tender issued in August, state news agency WAM reported. The agreement was signed by Khadim Al-Derei, vice chairman and managing director of Al Dahra, and Dragan Stepanovic, Serbian Deputy Minister of Economy. The operations that will be acquired from PKB Korporacija cover several agricultural and food sector activities. In terms of farming, Al Dahra will manage and cultivate more than 50,000 acres of farmland, which is spread across eight farms, close to Belgrade city centre. The different crops that will be produced include sugar beet 491 hectares; sunflower 2,136 hectares; wheat 3,552 hectares; corn 636 hectares; barley 1,454 hectares; soya 2,621 hectares; oilseeds 1,141 hectares; forage 2,322 hectares; silage 2,775 hectares; and a compound of feed and several vegetable varieties, WAM said. It added that Al Dahra will also manage the dairy operation and livestock business, which sell to the milk and meat production industries in Serbia.
STC And ConsenSys To Accelerate Blockchain Adoption In Saudi Arabia
Saudi Telecom Company STC and ConsenSys, a blockchain technology firm has announced the launch of blockchain on STC Cloud, a move set to accelerate blockchain adoption in the Saudi Arabia Kingdom. STC Cloud’s product allows clients to create blockchain nodes in a sandbox environment and build blockchain networks and test use cases without the need for infrastructure investment or heavy development. The Saudi company believes that its blockchain technology’s adoption will provide enterprises and governments with a path to enable mass adoption of the technology through dramatically lowering the costs of prototyping and experimentation with blockchain. “Blockchain on is one of several initiatives STC aims to roll out to its customers to pave the way for blockchain adoption. STC is committed to provide its customers with innovative solutions, and Blockchain on is one of many to be provided”, said Riyadh S. Muawad, Vice President of Government Sales & Key Accounts at STC Business. STC noted that the latest launch will further open emerging technology avenues by bringing blockchain technology to empower various industry verticals across Saudi Arabia, which comes in line with the Kingdom’s Vision 2030.
Ride Sharing Giant Careem Gains Additional $200 Million In Funding
Dubai-based ride service provider Careem announced on October 18, 2018, that it had secured $200 million in fresh funding from existing investors which includes Saudi Arabian billionaire Prince Alwaleed bin Talal’s Kingdom Holding, Al Tayyar Group, STV, and Japanese internet giant Rakuten. As Uber’s primary rival in the Middle East, Careem is estimated to have raised a total of over $500 million with its latest funding to expand into mass transportation, deliveries, and payments in the region. Careem was estimated to be worth around $1 billion as of December 2016, but the company didn’t disclose its new valuation after its latest funding round. Since it was founded in 2012, Careem has become the de facto app for more than 30 million riders and more than 1 million captains in over 120 cities in the Middle East, North Africa, Turkey, and Pakistan. Analysts expect the ride-hailing market to grow 8 times its current size by 2030, with much of this growth coming from emerging markets and Careem is expected to capitalize on this trend. It has developed one of the most recognizable brands in greater MENA.
Commodity Tracker
Business Events this Week In UAE
Gas & Oil Technology Showcase and Conference 2018
@ Dubai World Trade Centre
Date: 23 October 2018 To 25 October 2018
Business Updates
Many opportunities exist within a business environment but it is important for a business owner or an investor to understand the true value of any proposition. Buying a business, selling a business or leveraging a business’s value to raise funds can be quite complex and there will always be situations where one party to a business transaction will have more knowledge about the transaction than the counter-party.
At D&B we understand these kind challenges faced and strive to put everyone on equal footing in order for more informed decision making.
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