Natixis Sees Deals from Gulf States Monetizing Oil Assets

DUBAI (Reuters) – Natixis expects oil-rich Gulf states to accelerate privatizations, including by extracting revenue from oil assets, with Saudi Arabia and possibly Oman as likely candidates for similar deals next year, the French bank’s regional head said.

Lower oil prices as well as output cuts after the coronavirus crisis curbed demand for crude have weighed on Middle East oil exporters this year, leading them to explore new financing sources to cover wider funding needs.

Abu Dhabi’s oil giant, Abu Dhabi National Oil Company (ADNOC) raised $10 billion this year by selling a stake in its gas pipeline assets to a consortium of investors under a long-term lease agreement. Those investors raised debt through a bridge loan and bonds to back the acquisition.

“Finally clients are moving away from long-term project financing and moving to hard mini-perm loans with a take-out from project bonds which is proving extremely successful because it attracts a wider pool of liquidity,” said Barbara Riccardi, regional head for the Middle East corporate and investment banking business.

“That is something we really want to push on,” she said, adding that similar deals aimed at monetizing oil assets are expected from Saudi Arabia and maybe Oman too.

“It is happening and it’s probably going to happen faster than expected because they need to catch up as a consequence of this year,” she said.

Saudi Aramco has been in talks with BlackRock and other investors on a planned deal worth over $10 billion to sell a stake in its pipeline business, sources have previously told Reuters.

Oman has recently set up a new state energy company which will own part of the Gulf nation’s largest oil block and be able to raise debt.

Natixis also expects green financing to gain traction in the Middle East, with Saudi Arabia and the United Arab Emirates driving the push, Riccardi said. “We see a large pipeline of opportunities from Saudi,” she said.

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