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Banks seek advisory role for Egyptian refining IPO
EGYPT
JPMORGAN Chase & Co., Citigroup and Gold- man Sachs are among the banks vying for a con- tract to advise Egypt’s Arab Refining on its initial public offering (IPO), Bloomberg reported on February 26.
Also competing are EFG Hermes Holding, HSBC Holdings and Renaissance Capital, a source told the news agency. Arab Refining will select as many as three banks as consultants in the second quarter of 2020. They will advise on details such as how much of a stake Arab Refin- ing will offer up to investors.
As of press time, none of the banks men- tioned in the report had commented.
The IPO at Arab Refining, a subsidiary of Qalaa Holdings SAE, is one in a series of offer- ings that will take place in Egypt this year. They will provide the country’s ailing stock exchange with a jolt of liquidity.
Cairo unveiled a programme three years ago to sell stakes in major state-owned enterprises, as part of broader efforts to strengthen its economy. But plans stalled and there have been no new list- ings in two years.
The programme is set to resume in March, when the government will offer up shares in three state firms, including Egyptian lender Ban- que du Caire.
Arab Refining is due to make its debut in the fourth quarter. It is the owner of 67% of Egyp- tian Refining, which recently built a multi-billion dollar refinery near Cairo. Qalaa has said it wants to retain a controlling stake in the company through an agreement with shareholders.
Meanwhile, Qalaa’s power generation arm Taqa Arabia is also preparing to go public. It helped develop a major solar power complex in UpperEgypt.™
South Sudan hopeful of reaching oil production target in 2020
SOUTH SUDAN
SOUTH Sudan’s government is reportedly opti- mistic about its chances of reaching oil produc- tion targets this year after 100MW of generating capacity returned online.
The country is currently extracting around 185,000 barrels per day of crude, but it has said it hopes to see output levels average 200,000 bpd in 2020. Its efforts to do so have met with limited success, as many oilfields are reporting shortages of water and inadequate electricity.
But according to Mayen Wol Jong, the under- secretary of South Sudan’s Ministry of Petro- leum, these problems can be overcome. “We are targeting reaching and maintaining 200,000 bpd most of this year, as we sort out some of those shortcomings,” he told S&P Global Platts last week. The government is working to supply more water to the affected regions and also hopes to boost crude production by encouraging the useofenhancedoilrecovery(EOR)techniques, he said.
Conditions are also anticipated to improve following the completion of a new 100-MW power station near the capital city of Juba, he stated. The plant, which is due to be completed before the end of March, will supply electricity to
the country’s oilfields, he explained.
According to other sources, the new facility
will be a hybrid power plant with both solar and thermal generating facilities. It is being built by South Sudan’s Ministry of Energy and Dams and Ezra Power, a private company based in Juba.
South Sudan was producing about 350,000 bpd of crude in 2011, the year when it became an independent country. It extracted around 250,000 bpd in 2013, the last year before the out- break of civil war between backers of President Salva Kiir Mayardit on one side and rebel leader Riek Machar Teny Dhurgon on the other.
The Petroleum Ministry acknowledged in a report published last month that the civil war had adversely affected the country’s oil sector.
“Oilfield exploration and development work in South Sudan has been hampered since early 2014, [owing] to the security situation in the regions,”itsaid.
Officials in Juba are optimistic that the invest- ment climate will improve now that Kiir and Machar have formed a unity government.
They also hope to attract bids from interna- tional oil companies (IOCs) in a new licensing round that will be held later this month.™
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