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ADNOC Signs $1 Billion Worth of Engineering Services Deals

Logos of ADNOC are seen at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan, April 4, 2017. REUTERS/Toru Hanai/File Photo
Logos of ADNOC are seen at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan, April 4, 2017. REUTERS/Toru Hanai/File Photo
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ADNOC Signs $1 Billion Worth of Engineering Services Deals

Logos of ADNOC are seen at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan, April 4, 2017. REUTERS/Toru Hanai/File Photo
Logos of ADNOC are seen at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan, April 4, 2017. REUTERS/Toru Hanai/File Photo

Abu Dhabi National Oil Company (ADNOC) said Monday it had signed framework agreements worth up to $1 billion (3.67 billion AED) for Concept and Front-End Engineering Design (FEED) services for major projects across its full value chain.

The deals have a potential for 50 percent of the value to flow back into the UAE's economy under ADNOC’s In-Country Value (ICV) program, over the agreement term between 2021 and 2026.

Abdulmunim Saif Al Kindy, ADNOC People, Technology & Corporate Support Executive Director, said: “We are very pleased to engage with the eight top-tier engineering contractors awarded to provide best-in-class engineering expertise on our strategic projects across our full value chain."

"These framework agreements follow a competitive and accurate tender process," Al Kindy stressed.

He added that the smart nature of the deals will deliver substantial cost savings, optimize project delivery schedules and provide ADNOC with increased flexibility to drive its growth targets and proactively respond to the demands of the fast-evolving energy landscape.

Al Kindy further noted that the agreements offer the potential to create additional skilled employment opportunities for Emiratis and include commitments that contracted services will primarily be carried out in the UAE, ensuring more economic value remains in the country from our contract awards.

The framework agreements were signed with AMEC International Ltd (part of the Wood Group), Fluor, McDermott, Mott MacDonald, SNC-Lavalin International Arabia Limited – Abu Dhabi (part of the Kentech Group), Technip Energies, Worley, and a joint venture between Tecnicas Reunidas and NPCC.

The agreements will run for five years, with an option for a two-year extension.

The eight contractors have committed to set up and run enhanced training programs to further develop local expertise and enable knowledge transfer.

"As an integral part of its 2030 strategy, ADNOC is optimizing its procurement strategy to reflect market dynamics, focusing on long-term contracts with a reduced number of suppliers that provide stable and reliable delivery at highly competitive rates," ADNOC said.

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IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
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IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)

Pakistan has received “significant financing assurances” from China, Saudi Arabia and the United Arab Emirates linked to a new International Monetary Fund (IMF) program that go beyond a deal to roll over $12 billion in bilateral loans owed to them by Islamabad, IMF Pakistan Mission Chief Nathan Porter said on Thursday.

Porter declined to provide details of additional financing amounts committed by the three countries but said they would come on top of the debt rollover.

The IMF's Executive Board on Wednesday approved a new $7 billion loan for cash-strapped Pakistan, more than two months after the two sides said they had reached an agreement.

The loan — which Islamabad will receive in installments over 37 months — is aimed at boosting Pakistan's ailing economy.

“I won't go into the specifics, but UAE, China and the Kingdom of Saudi Arabia all provided significant financing assurances joined up in this program,” Porter told reporters on a conference call.

The global lender said its immediate disbursement will be about $1 billion.

In a statement issued Thursday, the IMF praised Pakistan for taking key steps to restore economic stability. Growth has rebounded, inflation has fallen to single digits, and a calm foreign exchange market have allowed the rebuilding of reserve buffers.

But it also criticized authorities. The IMF warned that, despite the progress, Pakistan’s vulnerabilities and structural challenges remained formidable.

It said a difficult business environment, weak governance, and an outsized role of the state hindered investment, while the tax base remained too narrow.

“Spending on health and education has been insufficient to tackle persistent poverty, and inadequate infrastructure investment has limited economic potential and left Pakistan vulnerable to the impact of climate change,” it warned.

Prime Minister Shehbaz Sharif in a statement hailed the deal that his team had been negotiating with the IMF since June.

Sharif, on the sidelines of the United Nations General Assembly, told Pakistani media that the country had fulfilled all of the lender’s conditions, with help from China and Saudi Arabia.

“Without their support, this would not have been possible,” he said, without elaborating on what assistance Beijing and Riyadh had provided to get the deal over the line.

The Pakistani government has vowed to increase its tax intake, in line with IMF requirements, despite protests in recent months by retailers and some opposition parties over the new tax scheme and high electricity rates.

Pakistan for decades has been relying on IMF loans to meet its economic needs.

The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.

Inflation has since tempered, and credit ratings agency Moody’s has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to “Caa2” from “Caa3”, citing improving macroeconomic conditions and moderately better government liquidity and external positions.