Petrofac has won a US$900 million contract to provide services for one of Oman’s integrated oil and gas projects.

The UK-listed company, with yards in Abu Dhabi and Sharjah, said it would provide engineering, procurement and construction for Petroleum Development Oman’s Yibal Khuff development project over the next four-and-a-half years. The project, located about 350 kilometres south-west of Muscat, is expected to come online in 2019 and produce crude and sour gas.

The managing director for Petrofac’s engineering and consulting services, Craig Muir, said the company would use the “local supply chain and recruitment of local resources” to deliver the project.

The contract would not dent Petrofac’s backlog, said Alex Brooks, a London-based energy analyst at Canaccord Genuity.

A quarter of the contract is for professional services, with the remainder for pass-through procurement, which represents a significantly lower contract value of about $225m.

“Comparing to the group’s backlog of about $19bn, this [contract] is only about a 1 per cent addition,” Mr Brooks said. “It is not completely irrelevant, but it is a small addition.”

Petrofac shares rose slightly to £9.05 each in early morning trade in London from £8.96 from yesterday’s close.

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I recently won a large project with a great client worth about US$150,000. Not bad for someone who works from home and keeps 90 per cent of what he makes.

I don’t mean to brag, but it’s true. And as someone who helps other salespeople to improve their performance, it is frustrating to see many of them working so hard for small deals. For most companies it’s the big deals that matter, as those are the ones that pay the bills.

I have traced my steps to see what was done right and what was not with this recent deal, and here is what I realised:

I marketed to the prospect well

The potential client had first seen me in action when I spoke at a business networking event. That was a great way to establish credibility and position myself as a trusted expert. I added him to my email newsletter list right after the event, so for some time he received regular valuable articles and videos sent from me to his inbox. He probably did not read most of them, but what matters is that over time he became familiar with me. I also came to learn later that he had sent his employees to other events I was speaking at, which he knew about from my newsletter.

I followed up

The prospect came to me after the event and told me he was interested. When I called him the next day, I didn’t get through. I tried another time and got no reply. So I emailed him, but still got no answer. Several emails and calls later, I finally got through to his secretary, who said he was keen to meet but needed more time. I called two weeks later, and continued this process of following up until, about six months later, we had a meeting. I knew following up was a good investment time-wise, as the prospect’s profile (he was a chief executive, open to new ideas and explained to me that he had high aspirations growing his business) and company (somewhat large in size and based in the UAE) really fits my target profile.

I looked for the fourth project first

Business relationships can last as long as you want them to – you just need to nurture them. I sold a small project to him at first with the intention of whetting his appetite and letting him see the value I can provide to their business. This set things up nicely for the much bigger project, which I closed with him 11 months after the first project. Even though I have sold this big deal now, I’m still looking ahead to how I can help him even more in the future.

I sold value, not methodologies or deliverables

My focus during the sale was on objectives (the outcomes the company can expect if they work with me), value (the money and time made or saved) and measures (how we will measure this value). He lapped up every word I explained about it. The methodology and deliverables came as a distant second in importance during the conversation, and rightly so. They are, after all, mere commodities – anyone can do a client interview, create a marketing strategy or anything else I do. But how many can promise a 15 to 20 per cent increase in sales within the first year?

I prepared for each sales meeting

Each time I had a meeting with him, I prepared for it vigorously. I made sure I communicated in advance how he would spend his precious time with me. I anticipated and developed creative responses to objections he had. I even role-played the meeting several times with my wife and my brother so I was completely ready. On the day, I made sure I worked on my mindset so that it was, focused and ready to close the sale. I listened to positive music, I meditated to the point where what I wanted out of the meeting was clear in my head and I was determined to get it.

This reflection strengthens my feelings about certain aspects of selling. Delivering what you sell is the easy part – selling what you sell is the difficult part. When a large opportunity presents itself to you, never jump in without preparing for it. It can mean the difference between winning or losing the deal. Focus on the value of what you sell during the sales process and you’ve got them.

Ahmed Al Akber is the managing director of ACK Solutions, a firm that helps companies improve their marketing and sales results

Islamic trade finance underpins FGB strategy

The Abu Dhabi-based lender FGB says its Islamic trade finance business is booming as the government shrugs off the drop in oil price and continues spending on infrastructure.

That has kept imports for materials flowing into the country and created work for banks keen to get other sources of income apart from their traditional mainstay of vanilla-flavoured loans and deposits.

“Trade finance is very much a growing segment for banks in the UAE, whether conventional or Islamic, but Islamic trade finance is becoming more and more popular with clients in the UAE,” said Shamzani Hussain, the global head of Islamic banking at FGB’s wholesale banking group.

“Most of the these companies are companies that import materials from outside, companies that have clients outside the UAE.”

Mr Hussain declined to give specific figures for the size of FGB’s Islamic banking assets or the size of its business in trade finance but said that its Sharia-compliant assets had grown more than 80 per cent since 2013 as clients warmed to doing business the Islamic way.

Almost a quarter of all banking assets in the UAE do not bear interest, which is proscribed under Islam, but instead come with a pre-agreed profit rate, compared to about 11 per cent in 2006, he noted.

“There are clients that are interested in Islamic banking but do not have enough information,” he said. “They are not well educated as yet. This is an interesting group because what we are doing today is going out and educating our potential clients that would like to know more about Islamic banking.”

Like most banks in the UAE, FGB realises that it cannot survive on loans alone and has consequently beefed up its fee income business from underwriting bonds and securities, displacing HSBC to become the nation’s top arranger of syndicated loans. It has also expanded its footprint abroad in recent years, and since 2013 has grown its Islamic banking footprint. That helped make the bank the most profitable in the UAE last year.

“One of our key strategies apart from focusing on the UAE as our main market is to market our Islamic banking products across our seven international offices,” said Mr Hussain. “This is part of our strategy to diversify our revenue stream and be where are clients are.”

FGB has representative offices in London, Seoul and Hong Kong, and branches in Singapore and Qatar. Its representative office in India is being upgraded to a branch, and it is planning to operate a representative office in China by the end of the year.

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Bonds bearing up as Mena equities hit

Uncertain global growth prospects and an end to the run-up in commodity prices seen in the first four months of this year hurt Mena equities, but bonds performed comparatively well.

The Citi Mena Broad Bond Index rose slightly and outperformed the World Government Bond Index and the Emerging Market Bond Index Global Diversified alike.

The headline purchasing managers’ index (PMI) reading for Saudi Arabia declined in April but remained a robust 58.3 as the US$29 billion supplementary spending programme announced this year continued to seep into the economy. At the same time, details emerged that the fall in oil prices, combined with higher public spending, was leading to a depletion of foreign currency reserves.

The PMI reading for UAE remained above 56 in April and May, showing continued expansion, although with some loss of momentum. The continued diversification of the UAE economy is feeding through to healthy non-oil economic growth but also inflation, which remained at a six-year high in April, largely as a result of jumps in property prices.

Oman and Bahrain are considered to have the weakest financial position among GCC members in terms of projected fiscal deficits and net assets at their disposal.

During May, the Bahraini government approved a draft budget that projects a fiscal deficit equivalent to 12 per cent of DP, suggesting the authorities have little appetite for fiscal consolidation.

Meanwhile, Oman’s total government revenues dropped by 24 per cent in the first quarter of this year compared with the same period of 2014, largely as a result of falling oil prices. But government spending on energy subsidies dropped by 48 per cent and by 25 per cent on defence over the same period. At the same time, the Omani government is continuing to spend on infrastructure and economic development projects that it hopes will broaden the economy and eventually reduce its dependence on oil. Public investment spending thus rose more than 2 per cent in the first quarter compared with the same period last year.

While oil price volatility was expected to impose fiscal constraints on the GCC, the region’s commitment to growth has been demonstrated through continued government focus on domestic spending plans.

This commitment has been supported by the huge financial reserves most of these countries enjoy and has not involved any meaningful access to capital markets yet, which thus remain a largely untapped resource.

While it is not clear that we will witness a resumption of the recovery in oil prices seen in the first four months of this year, there seems to be a growing awareness in GCC countries of the need to cut back on a vast array of subsidies and build necessary infrastructure in a bid to diversify national economies. Thus, Oman has cut back on defence spending and subsidies but is increasing its investment spending.

GCC countries have also been looking to diversify their sources of income.

Last month, officials of the six-nation GCC met in Doha and agreed to keep working on the introduction of value-added tax around the region according to mutually agreed principles. They also agreed to ask the IMF to conduct an in-depth study of the effects of low oil prices on their financial stability, domestic energy prices and tax policies.

In addition, there have been some signs of rebalancing, with loan growth slowing in many places. According to the Saudi Arabian Monetary Authority, for example, loan growth in April rose at a monthly rate of just 0.5 per cent and a yearly rate of 9.4 per cent – the lowest levels seen in the kingdom in three and a half years.

All in all, notwithstanding some build-up of pressure on public finances, fundamentals in the GCC remain broadly intact and our outlook for bond performance, particularly on a relative basis, remains positive.

Mohieddine Kronfol is the chief investment officer for fixed income and global sukuk at Franklin Templeton Investments Middle East

Emirates Global Aluminium (EGA) on Thursday said it would cut around 4 per cent of its workforce as part of a strategic restructuring.

The move, which would see around 250 support positions eliminated, is aimed at creating a leaner entity and increasing competitiveness as it looks to expand in the UAE and abroad, EGA said in a statement.

More to follow.

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Off hours: Dubai-based asset management head finds refuge on the desert roads

Majid Hassan is the head of asset management Middle East for Mirabaud, the Swiss-headquartered private banking and asset management group.

The Briton, with Saudi and Lebanese parents, has lived and worked in the region since graduating from university in the UK. The 42-year-old lives in Dubai, with his wife and three children – two daughters aged nine and four and a son, aged 11.

Mr Hassan, who has led Mirabaud Asset Management in the region for a year following stints at global and regional financial services firms, is also the president of the London Business School Gulf Alumni Association.

What are your favourite things to do on the weekend?

With so much travel meeting Mirabaud’s clients around the region, weekends for me are about being at home with my family – my wife, Rana, and three kids. Often we will spend the weekend in one of the smaller emirates, our favourites being Fujairah and Ras Al Khaimah – we are so lucky to have such stunning landscapes so close to our city. My guilty pleasure is my motorcycle and most Friday mornings I get up very early and meet up with four or five of my rider buddies and we head out on the roads of the UAE. The feeling of freedom on the open road in the desert is remarkable and refreshing, and gives me an opportunity to escape the pressures of office life.

What do you consider to be your favourite hobbies?

Motorbiking and football. I currently ride a Harley Davidson Ultra Limited Tourer – I say “currently” because I cannot rule out another purchase in the near future. Watching football with my son is also an important part of my weekend. We are both massive Arsenal fans and have enjoyed a great run, recently winning the FA Cup.

What can’t you live without?

How did we ever function without smartphones? My iPhone is glued to my hand, apart from when I am on my motorbike. Honestly though, I think the most important thing in life is being able to laugh, relax and let your hair down.

What do you consider the secret to your success?

I am a people person, so I credit networking and really working on long-term relationships as the key to any success I have had. Mirabaud has been here in the region for years and I joined in large part because of the long-term relationships it has built in the region. I have always been fairly unflappable and do not get too stressed. I think learning to enjoy your time off helps with this and anyway, my family would never let me get away with any kind of emotional self-indulgence.

What advice would you offer others starting out in your business?

Get out there and meet as many people as you can – network, network, network. There is no substitute for being extremely well connected. Of course how you conduct yourself within the network you build is also critical, and you must be honest and transparent with your clients. That will help you earn their trust and help you build long-lasting relationships with them. You should also be prepared to go the extra mile for your clients too to distinguish yourself from the competition.

How do you achieve a work-life balance?

It is not always possible, especially with a hectic travel schedule. However I do spend any free time I have with my family, taking them on a holiday, reading a good book, going for a swim and doing the things that I enjoy the most. When you travel as much as my job requires it is important to set aside time to spend with the really important people in your life.

How do you relax after the working day?

I always make sure that I am home before the kids go to bed to read them a bedtime story and tuck them in bed. This is important for them, but it also helps me to unwind and remember the priorities of life such as getting to spend quality time with my wife.

If you were not head of asset management, what else would you be doing?

It has always been a dream of mine to own and run a restaurant. I know this is a notoriously hard way to make a living, but I would love to give it a go. I would have to think hard about the theme, but maybe a high-end steak house.

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Top companies in the Arab World 2015 – in pictures

1st: Sabic. The list was based on disclosed financial statements for 2014, collated from stock markets across the region. Criteria considered when producing the list included total revenues, net earnings, total assets, and market valuation. The latter was based on April 1, 2015 closing prices. Saudi Arabia’s Sabic had $50.4 billion in revenue and an asset base of $90.9bn, Forbes said. AFP

2nd: Qatar National Bank. Emre Rende for The National

3rd: Etisalat. The UAE features the second-highest number of entries this year. Fatima Al Marzooqi / The National

4th: Saudi Telecom. In terms of number of entries, Saudi Arabia dominated not just the top 10, but the overall ranking. Represented by 59 entries on the list, the combined recent market value of this year’s Saudi companies stands at $436.5bn, with $159bn in revenue. Saudi Telecom ranked second last year. Courtesy: Saudi Telecom Co

5th: Saudi Electricity. Reuters

6th: National Commercial Bank (NCB). Michael Bou-Nacklie for The National

7th: Al Rajhi Bank. Ahmed Yosri for The National

8th: National Bank of Abu Dhabi (NBAD). Silvia Razgova / The National

9th: Emirates NBD. Pawan Singh / The National

10th: First Gulf Bank. Abu Dhabi Commercial Bank placed 15th and Emaar Properties 18th. Sarah Dea / The National

Emirates airline sees an opportunity to increase direct flights from Europe to cities other than its Dubai hub, but its chief executive said he is concerned about harming struggling European carriers.

Emirates also is actively considering a large purchase of Airbus A350 aircraft and Boeing 787s to replace older Boeing 777 widebody aircraft that will begin retiring in 2017.

“We’re just concluding our performance assessments,” of the Airbus and Boeing aircraft, Tim Clark said in an interview following a speech in New York. He declined to say when the airline would place orders.

Mr Clark said governments, airports and organisations in Europe frustrated with local airlines have asked Emirates to start offering international service from their airports, but that he is not planning to do so.

“The opportunity is there if we want it,” he said.

“If I was to put the (Airbus super-jumbo) A380 through multiple points in Europe, we would clean out the business like a Dyson hoover,” he added, referring to a vacuum cleaner.

“I don’t want to do that.”

The remarks on Europe come as Emirates and two other Gulf carriers under attack from their US rivals for allegedly competing unfairly by receiving state subsidies.

Emirates in 2013 became the first Middle Eastern carrier to fly passengers from Milan to New York.

The US carriers want their government to alter its “Open Skies” agreements with the UAE and Qatar, accusing them of lavishing their airlines with over $40 billion in subsidies and distorting competition. Emirates, Etihad Airways and Qatar Airways deny the subsidy claims.

“Emirates has received $5.8 billion in subsidies and other advantages from the UAE, a direct violation of Open Skies agreements,” the Partnership for Open Skies said in a statement. It represents American Airlines Group, United Continental Holdings, Delta Air Lines and numerous aviation-related labor unions.

On Wednesday Mr Clark called the US allegations “stuff and nonsense,” noting that in May Emirates said it would pay $700 million in dividends to its Dubai government owners and $300m in bonuses to employees.

“How can that airline be subsidised if it pays its shareholders and staff a billion dollars,” he said in a speech to the Wings Club, a New York aviation association.

He said officials in Seattle, Washington, and Orlando, Florida had praised Emirates for bringing service to their cities because it boosted their economies with jobs, tourism and trade.

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Own a piece of paradise off Abu Dhabi coast with Dh27m villa – in pictures

The villa on Nurai Island comes with four-bedrooms and is one of 25 villas and a boutique hotel resort at the development. Courtesy Gulf Sotheby’s International Realty

Set on the waterfront, the villa measures in at 25,000 square feet. Courtesy Gulf Sotheby’s International Realty

The villa is spread over three floors and has a private pool and Jacuzzi. The island can only be accessed by boat or helicopter, so there are no cars except golf carts. Courtesy Gulf Sotheby’s International Realty

The kitchen. The villa was completed last year and is yet to be lived in. Courtesy Gulf Sotheby’s International Realty

The property has an open plan design, has five bathrooms, marble flooring, a garden and courtyard. Courtesy Gulf Sotheby’s International Realty

Gulf Sotheby’s International Realty, the Dubai-based company listing the property, said it is in a “Maldives-like setting’.. Courtesy Gulf Sotheby’s International Realty

While this property is available for Dh27m, another in the development is priced at Dh55m. Courtesy Gulf Sotheby’s International Realty

Even the bathrooms feature a sea view. Courtesy Gulf Sotheby’s International Realty

Staff at the nearby Zaya Nurai Island hotel provide island residents with maintenance and daily services. Courtesy Gulf Sotheby’s International Realty

Dh27m ‘Maldives’ luxury villa 10 minutes from Abu Dhabi

UAE property investors looking for the ultimate getaway can include Abu Dhabi’s Zaya Nurai Island on their list of options, but they will need a well-lined wallet to secure it.

The latest property in the luxury development to hit the market is a Dh27 million four-bedroom waterfront villa.

The island is a 10-minute boat ride from a Saadiyat Island jetty from where the owner can then reach their home, which promises a “Maldives setting”, according to the Dubai-based Gulf Sotheby’s International Realty listing the property.

It is one of 25 villas and a boutique resort hotel that make up the development. While this villa, which has never been lived in, was first completed last year, others are still in the process of being handed over.

Set on the waterfront, the villa features open spaces filled by natural light built over a plot of about 25,000 square feet. Spread over three floors with a private pool and a Jacuzzi, its total built-up area is 10,011 square feet.

The villa comes with five bathrooms, marble flooring, a garden and a courtyard.

The 4.3-million-square-foot development is operated by Zaya Retreats, a resort spa and residence management company. It encourages residents to take advantage of the amenities in the island, which include three restaurants, multiple lounges, a private helipad, a fully equipped spa and fitness centre, private beaches and a floating marina with arrivals lounge for residents, resort guests and visitors.

The hotel Zaya Nurai Island by Zaya Retreats opened in January, and its 32-villa resort has prices starting about Dh3,290 for one-bedroom villas. Dubai-based Zaya Hospitality manages the villas.

Its staff can also provide island residents with the basic maintenance and daily services such as concierge offerings, housekeeping, security and catering.

Since the island can only be accessed by boat or helicopter, there are no cars except golf carts and hence no need for car parking spaces.

This, however, is not the only pricey home available to buy on the island. Another, a beachfront estate with six bedrooms and eight bathrooms, is on the market for Dh55m.

Its features include a large pool in a private garden, a games room, staff quarters, smart home technology and a Jacuzzi with an accompanying steam room and sauna.

What are the asking prices for similar homes in the capital?

Waterfront villas in Abu Dhabi are in short supply, but some – such as a five-bedroom villa in Al Raha Beach – have an asking price of about Dh18m, according to online property search websites. Those in Dubai’s Palm Jumeirah range from about Dh20m to Dh78m.

How have residential sales prices in the capital performed recently?

Sale prices of Abu Dhabi’s apartments and villas remained stable during the first quarter of this year at about Dh16,000 per square metre, according to JLL. Prices for Dubai properties have declined during the same period. Rents for prime two-bedroom apartments increased during the period due to the limited inventory. Rents rose on average 4 per cent to touch Dh163,000 a year for prime two-bedroom apartments.

What is the forecast for the Abu Dhabi residential market?

About 5,000 more residential units are expected to come on to the market this year, according to JLL. These will include Aabar Properties’ The Views on the Corniche, Hydra Properties’ Hydra Avenue and Aabar’s The Wave on Al Reem Island, Aabar’s C59 Rawdhat on Airport Road and Abu Dhabi National Insurance Company’s Amwaj 2 at Al Raha Beach. “There remains a shortage of quality supply across all price points and an acute shortage of affordable housing,” according to JLL’s first-quarter report on the Abu Dhabi residential market.

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