Kuwait: February 6, 2019
GCC member states will require around US$320 billion in expected capital expenditure for oil and gas projects over the next five years
KUWAIT: NBK Capital, a leading regional investment firm, participated in the recent Petroleum Economist Energy Strategy Forum held in Kuwait City. Mr. Rani Selwanes, Managing Director and Head of Investment Banking at NBK Capital participated as a panelist to discuss: New Methods for Financing Energy Projects and Investment Opportunities.
In his remarks, Mr. Selwanes focused on the growth prospects and capital expenditure for Kuwait’s oil sector. He presented insight into the various financing tools available for the oil sector. Furthermore, he added that the K-companies will be able to adopt structured financing structures to secure long-term financing including direct bank loans and global market fixed income issuances. Mr. Selwanes highlighted the key challenges borrowers, including Kuwait Petroleum Corporation and its subsidiaries, have to consider while obtaining financing, including; the extensive timelines associated with formal approvals, regulatory restrictions on the local banking sector, and international investor stringent requirements including collaterals disclosures and corporate governance.
The Arab Petroleum Investments Corporation (“APICORP”) estimates that GCC member states will require around US$320 billion in expected capital expenditure for oil and gas projects over the next five years, while the Middle East and North Africa region is expected to invest around US$611 billion in the energy sector over the same period.
Selwanes emphasized on the local banking market’s ability and readiness to support and finance the Kuwait’s oil sector upcoming mega projects.
“The Kuwaiti banking sector has significant capacity and ample appetite to finance the oil sector’s projects,” Mr. Selwanes said. “There are several advantages to obtain financing through the local banks as opposed to International financing, including the attractive interest rate environment in addition to the Kuwaiti banks’ ability to provide US$ financing, which what the market witnessed during the US$ financing of the Duqum refinery in Oman.”
The forum highlighted the important factors impacting energy strategy in Kuwait and the GCC states. Keynote speakers included HE Dr. Khaled Al-Fadhel, Minister of Oil, Electricity and Water; Mr. Hashem S. Hashem, Deputy Chairman and CEO of Kuwait Petroleum Corporation and Mr. Abbas Al-Naqi, Secretary General for the Organization of Arab Petroleum Exporting Countries.
A world-class investment house, NBK Capital’s customer-centric approach provides forward-thinking solutions that address the specific investment needs of clients and investors, institutional customers and high-net-worth individuals.
consistent government debt issuances and the mar-ket eagerly looks forward to seeing a revision of existing laws that currently limit the ability of the State from doing so.
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