Page 7 - DMEA Week 05 2021

DMEA POLICY DMEA

Tamar partners agree terms on

Israel supply deal

ISRAEL AN agreement has been reached between the Delek were opposed to the deal, citing concerns
Israel Competition Authority and the partners about competition between the two fields. The
The agreement draws developing the offshore Tamar gas field, bringing Leviathan consortium is comprised of Delek
a line under a dispute to an end a dispute and saving the Israel Electric (45.33%), Chevron (39.66%, operator) and Ratio
over how the field’s gas Corp. (IEC) around $30.5mn. Oil Exploration (15%).
is marketed. Shareholders in the Tamar field are: Isramco Chevron, which acquired the assets of Noble
Negev 2 (28.75%), Chevron (25%, opera- Energy last year in a $5bn takeover, was mired
tor), Delek Drilling (22%), Tamar Petroleum in controversy having been accused of cutting
(16.75%), Dor Gas Exploration (4%) and Everest gas supplies to IEC, though according to Delek
Infrastructures (3.5%). CEO Yossi Abu, no reduction in flows ever took
The agreement will allow Isramco, Tamar place.
Petroleum, Dor and Everest to sell gas to IEC Speaking following the latest announce-
separately, in accordance with their sharehold- ment, Chevron East Mediterranean manager
ing in the project. This will apply to gas sales Jeff Ewing said: “Chevron is committed to work
from Tamar to IEC from October 2020 until in co-operation with all the parties at interest in
June 2021, when the company’s current contract Israel in order to achieve mutually productive
expires. results. The settlement obtained yields positive
In September 2019, Isramco and Tamar results for all the parties at interest, including
agreed to reduce the price the utility pays for its electricity consumers, and brings this complex
gas from the $6.30 agreed in 2012 to $3.7-4.4 commercial dispute to a close.”
per million British thermal units (mmBtu) in Meanwhile, IEC chairman Yiftah Ron-Tal
an effort to win back the volume of gas they lost said: “The IEC continues its determined cam-
to partners in the Leviathan gas field in a ten- paign to cut gas prices and reduce costs of pro-
der several months earlier, when IEC elected to duction and thus bring good news to the public
diversify sources of gas. However, Chevron and of the cheapest price in Israel.” ™

MbS plans listing more Aramco shares

SAUDI ARABIA AT last week’s Future Investment Initiative con- assets under management (AUM) and accord-
ference in Saudi Arabia, the Kingdom’s Crown ing to Rumayyan, this is expected to increase to
Aramco saw the Prince Mohammed bin Salman (MbS) said that SAR4 trillion ($1.07 trillion) by 2025 and SAR7.5
world’s biggest IPO in more shares in Saudi Aramco would be sold in trillion ($2 trillion) by the end of the decade.
December 2019. order to expand the country’s Public Investment Prior to the 2019 IPO, it had planned a listing
Fund (PIF). of up to 5% on either the London, Tokyo or New
“There will be Aramco share offerings com- York stock exchanges, but with concerns about a
ing in the coming years, and this cash will be lack of investor appetite as well as potential legal
transferred to the Public Investment Fund,” he issues relating to the involvement of Saudis in
said, noting that the PIF would use the proceeds the 9/11 attacks in the US these ambitions were
to invest both locally and internationally. pegged back.
The comments echoed statements from PIF Meanwhile, speaking at the ‘Davos of the
governor and Aramco chairman Yasir Al-Ru- Desert’, MbS noted that the mega-projects
mayyan earlier in the week. backed by the PIF, which include the $500bn
In late 2019, the Saudi government sold a futuristic business park and city NEOM and a
stake of 1.5% in Aramco in the company’s ini- Red Sea tourism hub have a zero book value in
tial public offering (IPO) on the Tadawul All PIF’s accounts and are expected to generate rev-
Share Index (TASI), the Saudi stock exchange. enues, thereby expanding the fund.
This raised $25.6bn, making it the world’s largest The PIF has plans in place that will see it
every IPO, with a further 0.2% or so sold later spend SAR3 trillion ($800bn) into new sectors
that increased the return to $29.4bn. This was over the coming decade while creating 1.8mn
duly transferred to the PIF, which is the country’s direct and indirect jobs by 2025.
main sovereign wealth fund. Saudi Aramco is currently valued at around
The fund currently has around $400bn of $1.86 trillion. ™

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