Drake & Scull International venture wins Iraq contract

Dubai-based Drake & Scull International, or DSI, said its share of a pipeline installation contract at the Zubair oil field in southeastern Iraq is worth about $180 million (Dh661 million). DSI said it was awarded the $358 million contract along with SICIM SpA, an Italian company that builds and installs oil pipelines. The project scope is engineering, procurement and construction, or EPC, services for oil and water flow lines, water trunklines, oil transfer pipelines, and connections to wellheads and degassing stations, DSI said in a statement posted on the Dubai Financial Market website. Production at the Zubair field — one of the Iraq’s largest — is currently about 300,000 barrels a day and is expected to rise to a plateau of 1.125 million barrels a day in 2016, once the full field-development plan is completed. “The Iraqi construction market offers massive potential in areas such as Oil & Gas where there is a huge demand for EPC contractors,” said DSI Chief Executive Khaldoun Tabari. “The country is also undertaking substantial developments to revolutionise its social infrastructure and as such we can expect demand for our type of services.” Nomura Nomura Holdings Inc is cutting a third of its investment banking jobs in Dubai as Japan’s largest brokerage seeks to reduce costs by $1 billion (Dh3.67 billion), according to a person familiar with the situation. Nomura is firing four of 12 bankers in Dubai, including Scott Ferguson, head of investment banking in the Middle East and North Africa region, said the person, declining to be identified because the cuts haven’t been publicly announced. The departures are part of Nomura’s plan to reduce costs by $1 billion, with almost half the savings coming from Europe. The revamp in strategy follows a four-year struggle to build a business overseas following the purchase of Lehman Brothers Holdings Inc’s European and Asian units in 2008. Scott Ferguson didn’t immediately return a message left on his work telephone. Takanori Kaneko, a Tokyo-based spokesman for Nomura, declined to comment. A spokesman for Nomura in Dubai, who asked not be identified according to company policy, confirmed a “handful” of people had been fired, declining to provide specific numbers. Standard Chartered, the British bank which earns most of its profit from Asia, appointed Steve Perry as head of capital markets for the Middle East, North Africa and Pakistan as part of a new expanded role. Perry, who joined in 2004, will also retain his current position as global head of project, aircraft and shipping finance syndications, the bank said in an emailed statement. Standard Chartered also said Salman Ansari will assume the role of regional head of debt capital markets for the Middle East, North Africa and Pakistan. Arcapita Bank Arcapita Bank won bankruptcy-court permission Wednesday to move forward with talks to line up what could be one the first bankruptcy-financing deal compliant with Islamic Sharia law. Judge Sean H. Lane of the US Bankruptcy Court in Manhattan authorised Arcapita, a Bahrain investment firm, to pay up to $500,000 (Dh1.8 million) to cover the expenses incurred by the lender it will soon choose to provide what Arcapita’s attorney called an unusual financing package. “We are looking for Sharia-compliant post-petition financing, which to our knowledge has never been done before,” said Arcapita attorney Michael A. Rosenthal, a Gibson, Dunn & Crutcher partner. In court papers, Arcapita said it is hoping to secure between $150 million and $200 million. It said the financing would likely be a Sharia-compliant murabaha, a facility in which the company would buy commodities at a marked-up price and then sell them to a third party to avoid Sharia’s general ban on borrowing money with interest. In addition to barring interest, Sharia financing is based upon such principles as fairness and avoiding excessive risk. Several years ago, Louisiana oil-and-gas company East Cameron Partners received bankruptcy financing from the holders of its Sharia-compliant bonds, but the loan charged interest. Even so, some would argue the eventual sale of the company’s equity to the bondholders, who in turn forgave the debt, satisfied the general principles of Sharia finance. Whether a deal complies with Sharia is put to scholars, although these scholars can reach different conclusions about the same deal. The risk and complexity involved with negotiating a groundbreaking loan that satisfies both Sharia and US bankruptcy laws entitles the lender Arcapita chooses to an expense reimbursement, Rosenthal said at Wednesday’s court hearing. He said Arcapita’s advisers approached 29 potential lenders, from which Arcapita received two firm proposals last week. Arcapita expects to commit to one of the two potential lenders by the week’s end and plans to secure court approval of the resulting financing next month. From gulfnews