Bahrain-based Islamic investment bank First Energy Bank is close to making its next two investments in the regional energy sector, its chief executive said.“If nothing goes wrong with the due diligence … before the end of the first quarter, we will announce at least two major deals,” Vahan Zanoyan told Reuters.
He said one of the deals, for which the bank will employ both equity and debt, will likely be in energy exploration. Activity in oil and gas production would likely pick up more quickly than the wider economy, he said.
Zanoyan said the second deal would likely complement the bank’s first investment, Menadrill, a company that provides drilling services for offshore exploration. Menadrill has ordered two jack-up drilling rigs worth $400 million scheduled for delivery by the end of 2010.
“The real capacity bottleneck and shortage is in the service sector, that’s why we made our first investment in Menadrill. Even if everybody stops every new project, ongoing operations will require services,” he said.
Zanoyan said investors in the region are still prepared to invest in cautiously designed energy projects despite the global financial turmoil.
First Energy Bank’s shareholder include the Libyan Investment Authority, the Abu Dhabi Water and Electricity Authority, Dubai Investments Co and Bahrain Islamic Bank
Bahrain-based Gulf Finance House raised the $1 billion paid-up capital of First Energy Bank, which focuses on investing in and arranging finance for energy projects in the Middle East.
Zanoyan said he expects oil prices, which fell some 70 percent from their peak last summer, to climb again once economic stimulus packages by Western governments take effect.
“I don’t think the upturn will be as strong (as the last rise in oil prices), I don’t think it will be necessarily as fast, but that’s why it will be more reliable,” he said. (Reuters)
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