Bahrain’s state oil company to appoint financial adviser, CEO says

MANAMA, May 16 (Reuters) – Bahrain’s state oil company nogaholding is in final talks to appoint a strategy consultant and financial adviser, its chief executive said on Monday, as the indebted country seeks to capitalize on high oil prices. energy and to sell or lease assets. .

Nogaholding, the parent company of Bahrain’s main state-owned energy companies, issued a request for proposals (RFP) for an independent financial adviser last week and expects to award it in about eight weeks, the group’s CEO told Reuters. Mark Thomas.

The aim is to develop an energy strategy within six months and an asset monetization program as early as next year, he said.

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Bahrain, a junk-rated non-OPEC minor oil producer, is one of the most indebted countries in the region. Gulf allies helped it avoid a credit crunch in 2018 with a $10 billion aid package. Ratings agencies Fitch and Moody’s said it would likely need more funding from Gulf neighbors.

“The independent financial adviser will review asset monetization, our debt and our debt structure, looking at opportunities where we can use alternative forms of financing like sustainability-linked loans,” Thomas said.

The adviser will also help nogaholding with a possible national hedging strategy, in coordination with the Ministry of Finance, to protect on the downside and unlock any upside, he added.

“We have very attractive oil prices right now. We typically run a budget, a national budget, at an oil figure of $60 to $65 a barrel to break even,” he said. International oil prices are above $110 a barrel.

The strategy consultant, for which a tender was issued in December, is expected to complete by early Q4 a national energy strategy, a nogaholding operating strategy and a carbon strategy aligned with Bahrain’s goal of zero emissions net by 2060.

Nogaholding will follow a similar monetization model to regional energy heavyweights Saudi Aramco and Abu Dhabi National Oil Company (ADNOC), Thomas said.

This included rental and sale-leaseback agreements and initial public offerings of subsidiaries. Bahrain could list one or more of its operating companies, including oil exploration company Bapco, Thomas said.

A previously published tender to monetize a pipeline between Saudi Arabia and Bahrain was dropped because debt related to the deal would likely have impacted nogaholding’s rating, Thomas said.

“When we look at the debt we’re taking on, it’s not helping our balance sheet at all. It’s instant money, but we don’t really need the money right now,” he said. declared.

Nogaholding wants to reduce its debt, Thomas said, although it can raise more if new projects require it. It can also refinance existing debt.

Bahrain could also consider increasing oil production if it made economic sense, Thomas said.

A large unconventional offshore field that Bahrain has discovered is currently too expensive to drill, but nogaholding is exploring using Aramco’s expertise in onshore unconventional fields.

He also said preliminary talks were underway with Gulf neighbors to possibly partner with solar power due to a lack of physical space in Bahrain, an island of about 765 square kilometers (295 miles). squares).

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Reporting by Yousef Saba; Editing by Toby Chopra and Barbara Lewis

Our standards: The Thomson Reuters Trust Principles.

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