Abu Dhabi to replay $4bn debt, as crude prices take a dive

Published May 27th, 2013 - 12:48 GMT
IPIC has a $659 million facility maturing in June and $2 billion denominated debt maturing in September.
IPIC has a $659 million facility maturing in June and $2 billion denominated debt maturing in September.

Abu Dhabi’s International Petroleum Investment Co (IPIC) expects to receive $4 billion in cash for a crude pipeline it built in the Gulf state, enabling it to repay some upcoming debt maturities, it said in an investor call.

The state-owned company built a crude oil pipeline from Habshan in the west of the UAE to its eastern port of Fujairah to bypass the narrow shipping route in the Gulf which Iran has threatened to block as western sanctions on its oil exports tighten.

IPIC undertook the pipeline project and Abu Dhabi National Oil Co’s (Adnoc) onshore unit Adco will be the operator. Ipic is in talks with Abu Dhabi’s department of finance and the Supreme Petroleum Council (SPC) on the reimbursement for the spending on the pipeline, senior executives said in the call.

IPIC anticipates to finalise provisional acceptance of the handover of the pipeline to ADNOC by June 30. The $4 billion reimbursement, which will be repaid in a phased manner over the next 12 months, will be partly used to pay debt maturities arising this year.

IPIC has a 67.5 billion Japanese Yen ($659 million) facility maturing in June and $2 billion UAE-dirhams denominated debt maturing in September.

IPIC also said it has fully-guaranteed a debt of $3 billion raised in April this year by Malaysia’s state-owned firm 1MBD and Abu Dhabi’s Aabar Investments through private placements to invest in various projects.

Crude Prices

US crude oil futures fell below $94 per barrel on Monday on growing concerns over economic slow down in China and US Federal Reserve Monetary may end its monetary stimulus program as unemployment claims fell last week.

OPEC may keep its crude oil supply unchanged at a meeting which is scheduled to be held later this week and this is also weighing on crude oil movement in the global market.

WTI crude oil continuing its negative trend for the fifth consecutive day. NYMEX crude oil futures for July delivery was seen trading down by 0.49% at $93.68 per barrel as of 10.08 AM IST on Monday.

Brent crude oil futures for July delivery also down by 0.09% at $102.53 per barrel as of 10.10 AM IST on Monday.

China would not give up its environment instead of short term economic growth said Chinese President Xi Jinping in a study session of the Communist Party s leadership.

This move is expected to reduce crude oil demand from China.

Crude oil futures are expected to continue their down trend for the day as there are no major data releases scheduled.

Also US and British markets are closed for the day on account of Memorial Day and Bank Holiday respectively.

Twelve members of OPEC supplied 30.5 mn barrels of crude oil per day in April as per its monthly crude oil market report.

Crude oil futures on India s Multi Commodity Exchange (MCX) for June delivery was seen trading down by 0.74% at Rs.5229 per barrel as of 10.01 AM IST on Monday.


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