Page 8 - MEOG Week 07 2022

MEOG FINANCE & INVESTMENT MEOG

nogaholding hires

firms to refinance loan

BAHRAIN THE Bahrain Oil & Gas Holding Co. (nogahol- Bin Daina noted though that nothing was
ding) has hired two regional banks to refinance planned imminently, but once it has been
a $1.6bn marabaha loan amid a lack in interest re-launched, the company could look to return
from international institutions. to debt markets following the successful comple-
Gulf International Bank (GIB) said on Febru- tion of an eight-year sukuk bond issuance in late
ary 15 that it had been hired alongside Mashreq March 2021 by nogaholding.
Bank, telling Reuters that the proposed transac- The issuance raised $600mn at a price of
tion “would have both Islamic and conventional 5.25% according to Reuters, with initial guid-
tranches and will be sustainability linked”. ance having estimated a price of 5.75-5.875%.
Sources close to the deal were quoted as say- The raise represents a significant increase from
ing that the lack of interest among international the expected $500mn with the company having
banks was due to credit risk and concerns about received demand of nearly $3bn.
returns. The sources noted that international Meanwhile, Bahraini Oil Minister Moham-
banks had also shown little interest in refinancing med bin Khalifa Al Khalifa also said last year
a $3.5-4bn loan for Oman’s Ministry of Finance that the Kingdom was considering monetis-
in January, with Bahraini, Emirati and Omani ing its oil and gas assets, including the 112-km
banks hired to underwrite the refinancing. Saudi-Bahrain A-B oil pipeline and the Bahrain
nogaholding was previously the invest- LNG import terminal.
ment arm of the National Oil & Gas Authority However, given the challenges in raising
(NOGA), which was abolished by King Hamad international finance for a loan of just $1.6bn,
bin Isa Al Khalifa in September with the firm’s the pricing of any such deals is likely to be very
functions assumed by the Ministry of Oil. aggressive.
Speaking in November, Mohamed bin One of the Reuters sources cited “excess
Mubarak Bin Daina, special envoy for Climate liquidity” as one of the reasons for the approach.
Affairs and CEO of Bahrain’s Supreme Coun- “Banks are going crazy here in the region. Lots
cil for Environment said that NOGA would of aggressive behaviour, whether it’s pricing,
be transformed into a vehicle that will help the whether it’s showing up with very, very large
Kingdom diversify its energy supplies. Bahrain’s tickets on situations - almost looking to take on
renewable energy target is to achieve 700 MW of deals bilaterally, which would previously be a
power generation capacity by 2030 solar, wind syndicated deal,” the source added.
and energy-from-waste. This is bearish for Bahrain’s plans to develop
“We’re now looking at the future of transition, its 80bn barrel offshore Khaleej Al Bahrain
transferring this company from an oil and gas (KAB) shale deposit which the Ministry of Oil
company into an energy company. That will help anticipates having the potential to produce up
us look at the climate change impact, the energy to 200,000 barrels per day (bpd). However, the
mix and the diversification of energy sources,” combination of complex geology and its offshore
Bin Daina said. location have raised questions about feasibility.
This followed the announcement by the Manama however, remains hopeful that devel-
island nation’s Cabinet of plans to achieve net opmental drilling can begin by the end of the
zero carbon emissions by 2060. year ahead of first oil in 2023.™

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