Ahmed Al Arbeed: CEO of Dana Gas, the largest regional private sector natural gas company in the Middle East: Ahmed Al Arbeed talks to Pamela Ann Smith about the future of the international oil and gas sector and explains how Dana Gas has managed to flourish despite the global financial slowdown. He also reveals some of the company's investment and operational strategies for the future.

Author:Smith, Pamela Ann
Position:The Middle East interview - Interview
 
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Dana Gas is helping to spread the Gulf's expertise and investment capability to other parts of the globe. Headquartered in Sharjah and listed on the Abu Dhabi stock exchange, it currently operates in Pakistan, Nigeria, Canada, the UK and Norway as well as in the UAE, Saudi Arabia, Tunisia and Egypt, where it made two more significant gas discoveries earlier this year.

Gas exports from Iran are also being discussed, along with further expansion in Iraq's Kurdistan region, where it is part of a UAE and European consortium which is planning to pump gas through the proposed $10-billion transcontinental Nabucco pipeline via Turkey. Formed in 2005 after a stock market flotation that involved 400,000 investors and offers of more than $78 billion in capital, it is now looking for further acquisitions in the region and abroad.

The financial crisis, as well as the growing emphasis on climate change, has greatly affected the oil and gas sector, as have the extreme price changes over the past few years. Oil demand in the US and Europe is stagnant or falling, but climbing in India, China and the emerging economies. Gas is seen as better for the environment than oil, so demand for it could also increase in the West. What do you think?

The past two years, I'm sure we all agree, have been the most cataclysmic for the oil and gas industry in many decades. Many people are questioning the conventional wisdom that the world's thirst for oil will grow for decades to come.

We are at a fork in the road. One path winds through a rocky landscape of mounting environmental concerns, such as fears over issues like global warming. Oil demand in the US, Europe, and Japan has already peaked, and it may soon start falling in other large economies, as policy frameworks increasingly aim for higher energy efficiency and lower carbon emissions.

The other path resembles a motorway crowded with shiny new vehicles. These are the cars driven by the newly prosperous residents of emerging Asian and Middle Eastern economies. The question is, "Will the pent-up demand for private transportation in countries such as China and India be sufficient to keep global oil demand trending upwards over the long term, or will the developing nations be among the fastest adopters of the energy alternatives that are starting to emerge?".

What do you think will happen? What does OPEC think?

It is still too early to tell. This creates an almost impossible planning scenario for the oil producers who, for most of the past century, have assumed responsibility for keeping the world reliably supplied with affordable energy. Many companies in our sector are seeking new business models. They are forging new alliances, in the hope of creating business structures that are more powerful, resilient and dynamic. In short, that are more capable of negotiating the unexpected twists and turns of the road ahead.

Access to capital is vital for any oil and gas company, especially if it wants to expand. Your original initial public offering (IPO) brought offers from potential shareholders of more than $78 billion. How do you explain this success?

The capital intensive and international nature of our industry makes such relationships [with shareholders] essential. The ability to form alliances in which the interests of all stakeholders are appropriately balanced and aligned is at the heart of the effective operation of our industry which, let's face it, remains crucial to global prosperity.

But it wasn't always that way, was it?

In the early decades of what I will call the global petroleum age, when it first became clear...

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