Gulf Navigation plans fleet expansion to capitalise on higher oil prices
Subscription to Dh448 million rights issue begins next week
Dubai-based shipping firm Gulf Navigation plans to use the proceeds of a Dh448 million rights issue to expand its fleet in a bid to capitalise on higher oil prices, its chief executive said.
“We are looking at a number of potentials - part of them is outright acquisitions and part of them is partial acquisitions,” Khamis Juma Buamim said in a Bloomberg Television interview. “These are all to do with the oil and gas sector and the growth potentials that we foresee.”
The recent stabilisation of oil prices – which has seen Brent crude futures rise to around $70 per barrel from under $30 in early 2016 – has led to regional oil producers ramping up plans to invest in refining and other downstream capaibilities, creating opportunies for local shippers, Mr Buamim said.
Abu Dhabi’s Adnoc plans to create the world’s largest, integrated refining and chemicals site in the world in the UAE, increasing its crude refining capacity by 60 per cent and more than tripling its petrochemical production.
Saudi Aramco and Sabic announced plans last month for a $20 billion oil-to-chemicals facility on the country’s western Red Sea coast.
“For quite a while there was a retraction in the oil market,” Mr Buamim said. “Now what we are seeing is that the refining capacity is starting to increase in the region. It’s an opportunity, and we have to take it.”
The company plans to increase its fleet to 20 vessels from its current level of 12 by 2020, he said.
Last week Gulf Navigation said it plans to acquire a majority stake in Singapore-listed Atlantic Navigation Holdings, a UAE-based integrated offshore supply operation engaged in the provisioning of marine logistic services, ship repair, fabrication and other marine services.
Mr Buamim told Bloomberg that Gulf Navigation is conducting due diligence and will take a decision later this month about whether to proceed.
Gulf Navigation’s board in December approved the Dh448m rights issue, the subscription period for which opens on February 11. The board also approved the issuance of a $250m sukuk.
Updated: February 4, 2018 05:04 PM