Page 18 - MEOG Week 29

MEOG n e W s in B rie F MEOG

Arabtec subsidiary wins through four units – fuels, chemicals, power where the company has business including
The downstream business will operate
Saudi Arabia, Kuwait, qatar and the Kurdish
Aramco contract and a pipelines, distribution and terminals region of Iraq. He said the company was
division, the company said earlier this month.
“apolitical” and a “commercial actor” in the
A unit of Arabtec Holding, the Dubai-listed Target Engineering also won a Dh280m region.
construction company, won a 200 million contract for the expansion and upgrade of “We engage with all of our different
Saudi riyal (Dh196m) contract from Saudi a water disposal facility in Saudi Arabia last stakeholders as we go through something like
Aramco for the replacement of storage tanks year. this,” Wirth said, declining to detail the timing
at Ras Tanura refinery in Saudi Arabia. the nationaL of discussions with partner governments.
Target Engineering Construction “We’re certainly are mindful of the fact that
Company, a wholly-owned subsidiary of Chevron to buy Noble for there are political differences and tensions
Arabtec, won the contract, the company said ...amongst those countries.”
in a statement to the Dubai Financial Market, $5B in stock, biggest oil Noble “offers an unique combination
where its shares trade. of shale as well long-cycle assets,” much as
“We are delighted to be continuing to build deal since price crash Anadarko would have, said Jennifer Rowland,
our relationship with Saudi Aramco in the analyst with Edward Jones, adding that she
kingdom of Saudi Arabia. In line with our Chevron Corp said on Monday it would buy thought the deal was unlikely to spark a wave
strategy, this important award further builds oil and gas producer Noble Energy Inc. for of consolidation.
the Group’s presence in the oil and gas sector,” about $5 billion in stock, the first big energy Pavel Molchanov, analyst with Raymond
Wail Farsakh, Arabtec’s group chief executive, deal since the coronavirus crisis crushed James, said a bidding war was unlikely, noting
said. global fuel demand and sent crude prices to the smaller scale of this deal — $5 billion
As part of the contract, Target Engineering historic lows. versus the $33 billion Chevron had offered for
will replace three naphtha storage tanks and Chevron, which last year dropped its offer Anadarko. He said other “prospective buyers
two slop oil storage tanks at the refinery for Anadarko when Occidental Petroleum would find it easier to replicate via other
located in the eastern province of the Corp bid more, has been seen as a financially means.”
kingdom, according to the statement. disciplined oil major best positioned to strike Noble’s assets will expand Chevron’s shale
Arabtec is the uAE’s largest-listed a deal during the downturn. This purchase presence in Colorado and the Permian Basin,
contracting company and has a workforce boosts its investments in u.S. shale and in the top u.S. shale field where Chevron had
of more than 45,000. Last year, the company natural gas with Noble’s flagship Leviathan been under pressure to expand. Last year’s
swung to its first full-year loss since field in Israel, the largest natural gas field in bid for Anadarko was an attempt to boost
2016, mainly on weaker income from its the eastern Mediterranean. Permian production, but Chevron ultimately
construction business as liquidity for projects The deal diversifies Chevron’s energy assets walked away and instead pocketed a $1 billion
remained tight. and makes it the first oil major to enter Israel. break fee.
The company reported a net loss to It “is a tremendous expression of confidence Since then, margins and drilling in
shareholders of Dh774.5m, compared to a in the Israeli energy market,” Israel’s Energy the Permian have been decimated by the
profit of Dh256.3m in 2018 as revenue fell 21 Minister Yuval Steinitz said in a statement. coronavirus crisis, which slammed fuel
per cent to Dh7.78 billion. The Israel assets “will rebalance the demand and pushed u.S. crude prices down
A slowdown in the real estate sector has portfolio towards gas and provide a to an average price of $20 per barrel in April.
resulted in fewer construction contracts springboard” in the region, said Tom Ellacott, Prices have rebounded, yet they remain
being awarded. However, Arabtec’s industrial, senior vice president at Wood Mackenzie. depressed, making assets cheaper. Just seven
infrastructure and mechanical as well as Chevron’s shift to more natural gas output months ago, Noble had a market capitalization
electrical and plumbing business lines comes as oil companies are under pressure to of about $12 billion.
remained profitable last year. reduce their carbon footprint. Gas is seen as a Shares of Noble were up 5.7% to $10.21,
Saudi Aramco, the world’s largest oil- cleaner burning fuel. after falling more than 60% this year through
exporting company, is currently reorganising Chevron Chief Executive Officer Mike Friday’s close. Chevron was down 1% to
its downstream business that includes refining Wirth said the company was “mindful” of $86.18.
and petrochemicals, to improve efficiency. tensions between Israel and nearby countries The offer values Noble at $10.38 a share, a

P18 www. NEWSBASE .com Week 29 22•July•2020