Dana Gas to develop 'gas cities'

Dana Gas successfully placed $1bn convertible sukuk in 2007, says Ahmed Rashid Al-Arbeed. (SUPPLIED)


Dana Gas is considering more investments and aquisitions as the company pushes ahead with an aggressive drive to become a major player in the gas business.

The company, the first private sector gas venture in the Middle East, enters more business sectors and penetrates new markets, bouyed by record earnings of more than Dh1 billion in 2007.

"We are pursuing opportunities and acquisitions currently under study in the Gulf and North Africa," said Ahmed Rashid Al Arbeed, Executive Director, Upstream, at the Sharjah-based company.

In an interview with Emirates Business, Arbeed said Dana Gas's expansion plans cover "East and the West" and the company is eying Algeria and other countries. Arbeed also spoke about Dana Gas's activities in the UAE, Egypt, Northern Iraq and other areas as well as its "gas city" plans in the emirates and other countries.

How do you evaluate Dana Gas' performance since it was created?

Last year was our first year of operations, with revenues in excess of Dh1bn. We also achieved major strategic milestones, which have laid foundations for continued growth in the years ahead. For example, we acquired Centurion Energy International for $1.1bn, which gave Dana Gas a base from which to grow its upstream exploration and production in the region.

Also in 2007, we marked another major achievement with the successful placement of a $1bn convertible sukuk offering, which was our first entry into international financial markets. Despite the turbulent situation in global credit markets, the placement was successful; it was not only carried out in a few days, but also had to be increased in size twice due to the demand from international investors. Dana Gas thus ended the year with cash from operations at Dh478m, while its total assets grew by 59 per cent to Dh10.8bn. Despite the recent weaknesses in global and regional financial markets, the share price of Dana Gas also increased by over 50 per cent in the last 12 months, though Dana Gas is still in the early stages of its growth potential.

What are Dana's main markets and are there any plans to enter new markets? If so, in what fields?

In addition to our investments and expansions in Egypt, Northern Iraq, and in the new concession offshore in Sharjah, we will also expand our concept of developing 'Gas Cities' in the UAE and other countries in the region, and pursuing acquisitions under study in the Gulf and in North Africa.

What achievements have you made in the fields of investments, contribution to UAE economy and jobs for nationals?

The management team of Dana Gas includes prominent UAE and GCC nationals who are experts in the energy business, and who play a vital role in executing the company's strategies. Our work in the UAE will make a huge difference to the country's economy, specifically given the immediate need for natural gas to fuel power plants. We have a regional outlook – we do not just contribute to the UAE economy, but to every economy where we operate. In Egypt, for example, we have made new oil and gas discoveries in the southern parts of the country, and this year Dana Gas is investing more than $175m to drill 19 new exploration wells.

In Iraq's Kurdistan region, we are investing about $650m jointly with our partner Crescent Petroleum, to develop, process and transport natural gas from two major gas fields to meet urgently needed local power generation requirements. This is the largest private sector project currently under implementation in Iraq. The natural gas projects executed by Dana Gas in Kurdistan will provide jobs for many Iraqis, and will result in annual savings for the Iraqi Government of up to $3bn in imported fuel.

It is not simply a matter of a few jobs, rather the fact that we will be powering entire industries and economies. We believe in actively and directly contributing to the communities we live in by improving the quality of people's lives, and addressing their needs. In Kurdistan, for example, we have spent more than $1m on community projects, including three soccer fields, power generators and school bags and stationery for more than 600 schoolchildren.

What is the focus of Dana's investments? Does it only cover natural gas or new fields, such as oil, petrochemicals, refining, etc?

Our strategic area of focus is the entire natural gas sector, from upstream exploration and production, through midstream gas processing and transportation to gas marketing and gas-fuelled industries, although Dana Gas Egypt is now involved in oil production. Nevertheless, it is important to keep in mind the natural gas business is growing rapidly across the region, where required investments in the rapidly-growing gas industry have been estimated at $212bn over the next five years alone. Dana Gas already has operations across the entire natural gas value chain, with assets covering gas exploration and production, processing, transportation and marketing to end users. The company is therefore playing a major role in upstream and downstream natural gas activities across the region. This means that Dana Gas will become an integrated partner of choice for a wide range of natural gas applications at macro and micro levels.

We are also extending our strength to our own concept of 'Dana Gas Cities', industrial complexes that will leverage external economies of scale by powering several industrial operations concentrated in the same area using natural gas. This will provide an added dimension to our economic contributions from three facets: the sustainable nature of this development, which will allow for the recycling of waste products into fuel for the Gas City; the importance of environmental protection and ecological sensitivity and the industrial synergies that will result with companies benefiting from each other.

When will Dana Gas fully commence its operations in the UAE?

We have already commenced some operations in the UAE, with phase one of our joint pipeline with Emarat under operation and delivering gas to end-users. Phase 2 of the joint project, to build and operate a 48-inch major onshore gas pipeline to transport up to 1bn cubic feet of gas within Sharjah to the Hamriyah Free Zone, is also nearing completion, and we also own the new processing plant in Sajaa, Sharjah.


PROFILE: Ahmed Rashid Al Arbeed, Executive Director, Upstream

Ahmed Rashid Al Arbeed is Executive Director, Upstream, at Dana Gas PJSC. He is the former Chairman and Managing Director of Kuwait Oil Company and joined the management team of Dana Gas in January 2008.

Al Arbeed has more than 30 years experience in the international petroleum industry. Previously he was board member of the Kuwait Petroleum Corporation, Chairman and Managing Director of the Kuwait Foreign Petroleum Exploration Co., Managing Director of the Kuwait Project for re-introducing international oil companies to develop Kuwaiti oil fields, and Managing Director of the Privatisation and R&D Programmes of KPC, as well as member of the Society of Petroleum Engineers (SPE), the Kuwait Engineering Society and the Association of International Petroleum Negotiators. During his appointment at KOC, Al Arbeed was responsible for the oil and gas production in Kuwait. He has been a member of the Dana Gas Board of Directors since its inception.