Qatar Petroleum (QP), one of the worlds largest
state-owned oil and gas companies, is considering a debut
corporate-level issuance in the capital markets, according to
It would be the first corporate-level issuance by a leading
Middle Eastern national oil company, and could establish a new
precedent for issuance by some of the worlds most
Issuing a sukuk, potentially at corporate level, is one of
QPs initiatives for 2012. The company will decide whether
or not to proceed in the next three weeks, depending on price
and liquidity in the market.
The firms only outstanding debt at corporate level,
rather than project level, matured in 2011. This was a
syndicated loan. However, the Qatari government, which owns QP
outright, has been a regular issuer in the Eurobond markets in
recent years, and a portion of the proceeds have financed
Part of the motivation behind issuing a sukuk would be to
facilitate future issuance by Qatari government-related firms,
including QPs subsidiaries. These include one of the
Middle Easts biggest petrochemical companies,
Industries Qatar the basic-industries holding company,
70%-owned by QP which was rated AA- by Standard and
Poors on February 15.
With Qatars upstream core gas developments fully
online in 2011, the state is looking to build more projects in
downstream oil and gas and hydrocarbon-dependent industries,
including petrochemicals and steel, as it builds the
infrastructure for the 2022 Fifa World Cup in Qatar.
Projects owned by QP have not issued in sukuk format before,
although they have issued in the conventional bond market. Most
recently, in February, the
Dolphin Energy gas pipeline, partly owned by QP, issued a
$1.3 billion 10-year Eurobond.
We want to establish our brand in all markets and
reach as many investors as possible in different geographic
locations, says Abdulrahman Al Shaibi, director of
finance at Qatar Petroleum. We dont want to be
exposed to a single market.
Last year saw
record issuance of sukuk, which has continued to accelerate
in 2012, partly because of a shortage of available investments
for Islamic banks and funds.
Sukuk is an important avenue for us to tap as we are
seeing liquidity is increasing in the
Islamic finance market, says Al Shaibi.
He also notes that the issuance would be facilitated by the
abundance of assets at QP, which would allow the sukuk to meet
Shariah principles. Qatar is well placed as it has
excellent assets to meet Islamic-finance criteria, he