The UK's Premier Oil in October said it had been the subject of a bid approach, but the identity of the potential buyer remains a mystery. British press reports claimed it was Dubai EnergyDubai Energy, but sources in the Gulf were sceptical.

India's Reliance Industries is also said to be interested.London Stock Exchange-listed Premier's portfolio of assets in Africa, Asia and the North Sea makes it an ideal candidate for a company looking for diversification and diversification is what investors in the UAE are looking for most, to recycle Abu Dhabi's huge stock of petrodollars, consolidate Dubai's globalisation ambitions and establish smaller emirates, such as Ras Al-Khaimah (RAK), as credible international players.

On 23 October, Premier revealed it had received a preliminary takeover approach, in a deal likely to value it at more than £1bn. Speculation over the bidder's identity settled on the UAE, in particular Dubai EnergyDubai Energy a subsidiary of Dubai Ruler Sheikh Mohammed Bin Rashid Al-Maktoum's (MbR) Dubai HoldingDubai Holding group, headed by formerConocoPhillips employee Ahmed Sharaf.

Dubai EnergyDubai Energy is an interesting player, but Emirati sources say there is considerable speculation that the new Abu Dhabi National Energy Company (Taqa)Abu Dhabi National Energy Company (Taqa) majority owned by the Abu Dhabi government's Abu Dhabi Water and Electricity Authority (Adwea)Abu Dhabi Water and Electricity Authority (Adwea) could be a possible bidder.

Taqa's CEO Peter Barker Homek in late October said the company planned to borrow $9.5bn over 18 months to finance expansion in the Middle East, Europe and Russia. Taqa is looking at "all opportunities" in the Gulf Cooperation Council (GCC)Gulf Cooperation Council (GCC) region and North Africa, Homek said: "We're also looking at a patch I would define as the UK down toMorocco and east to India and north to Moscow and then west again."

Abu Dhabi-based Aabar PetroleumAabar Petroleum (founded in 2005) has been mentioned as another possible Premier bidder, as haveKuwait Foreign Petroleum Exploration Company (Kufpec)Kuwait Foreign Petroleum Exploration Company (Kufpec), Australian independent Santos and Chinese companies. Aabar mainly concentrates on Asia, through its 2006 acquisition of Singapore-based Pearl Energy, but there were reports earlier this year that it would provide Pearl with the necessary finance to acquire licences in North and sub-Saharan Africa.

Premier's African assets may be one reason why the UK indie would attract Emirati companies, as a growing number of UAE-based investors have been looking to the higher risks/rewards offered by African E&P plays. Premier has assets in offshore Guinea Bissau, and the Western Sahara.Al-Thani leads the way UAE state-owned companies seem to be going in where UAE-based pioneers have charted a path. Already present across Africa, Dubai-based Al-Thani PetroleumAl-Thani Petroleum this summer signed a discreet deal with state oil company Société Nationale d'Opérations Pétrolières de la Côte d'Ivoire (Petroci) for Cote d'Ivoire's Block CI-105.

Al-Thani PetroleumAl-Thani Petroleum is headed by Abdullah Bin Saeed Al- Thani, a 49-year-old anthropology graduate, often now known as Sheikh Abdullah. The Sheikh specialises in brokering deals using his high-level contacts. Based in the UAE, he is often identified in media reports as a scion of the Qatari ruling family and a relative of the UAE's revered late president Sheikh Zayed Bin Sultan Al-Nahayan.

Al-Thani's first African play was in the late 1990s, when it was part of the PetrodarPetrodar consortium operating in Sudan's Block 3; the company has since sold most of its PetrodarPetrodar stake to China National Petroleum Corporation (CNPC), but it retains 5% under a subsidiary known as Arabian African Petroleum Company (AAPC).

It has been expected for many months that AAPC would seek a listing probably on London's Alternative Investment Market (AIM) and the very liquid Dubai market to raise funds for Al-Thani's African operations.

Analysis of the pattern of contract signings shows Thani Investments Al-Thani PetroleumAl-Thani Petroleum's parent company becoming increasingly active in signing initial exploration agreements, and then looking for partners. In late 2004, Al- Thani acquired rights to Mauritania's Block 19. According to one source active in the country, Al-Thani has emerged as a significant advisor to the Mauritanian government.

In December 2004, Senegal's state Petrosen signed contracts giving Al-Thani the Cayan block and four offshore exploration blocks. Al-Thani's staff includes exploration professionals raised in Tunisia's state Enterprise Tunisienne d'Activités PétrolièresEnterprise Tunisienne d'Activités Pétrolières: Ramzi Ghenima and former Etap exploration director Ali M'Rabet.

In February 2005,Tunisia awarded a five-year PSA to Thani Investments for the El Jem block;Thani agreed to invest at least $7m to drill a minimum of two wells. The following September, two agreements were signed in the UAE by Al- Thani and Tunisian Energy and Industry Minister Afif Shalabi, awarding Thani Investments the Gulf of Gabes Sidi Mansour concession and the Tozeur Block in south-west Tunisia.

Kampac's Senegalese base
Senegal has also attracted another UAE-based firm, Kampac Oil MEKampac Oil ME, part of Jebel Ali-based oil trader Kampac Group.

Kampac too has been working to set up a corporate structure to manage its African oil and gas concessions that could be brought to an initial public offering. Half of its two Senegalese assets one offshore and one onshore block will be offered through private placement first and then an IPO, Kampac chairman Charles Ampofo said last year.

In November 2005, Kampac signed up another piece of Senegalese acreage, in the deep-water St Louis Profond block, adjacent to Senegal's maritime boundary with Mauritania.

Kampac has a stake in Petrosen and Ampofo's Kampac Group is building the Privilege Hotel in Dakar, a luxury venue that should open in time for the 2007 Organisation of the Islamic Conference summit.

Elsewhere, in August 2005, Ghana and Kampac Oil Terminals signed a $70m agreement for a floating storage unit offshore Tema. Kampac is also involved in Democratic Republic of Congo, and last year won a contract to manage and update the DRC's telecommunications system.

Ampofo, a UK and US educated Ghanaian, is active in promoting UAE-African ties; he has coordinated visits by Dubai's Jebel Ali Free Zone to Ghana and Nigeria. Kampac is owned by Ampofo and other company executives and seems well-connected in Dubai.

East African exploration
It is not only Dubai's political connections that are raising the UAE's African profile. The city state's emergence as a major regional hub means an increasing number of Africa operators are basing there. This trend has accelerated as more IOCs, from the smallest minnows to supermajors, have come to take an interest in East Africa. East African Exploration (EAX) headed by Chris Matchette-Downes, previously with Jebco Seismic, is looking at Somalia and Kenya, after farming into Aminex's Nyumi licence off Tanzania earlier this year. In November 2004, Matchette-Downes organised Tanzania's third onshore/offshore licensing round in London.

EAX, owned by four private shareholders none of whom is a sheikh, the company says has a sister company, Upstream Petroleum Services (UPS), also based in Dubai (with seismic surveying and seabed geochemical crews based in Dar es Salaam).

Dubai is also a hub for Somalia focused activity and Perth's Range Resources has moved its operations to the emirate.

RAK emerges
Among the smaller emirates, Ras Al-Khaimah Gas AuthorityRas Al-Khaimah Gas Authority (RakgasRakgas), owned by the RAK emirate government, has reportedly put in a bid with Tanzania Petroleum Development Corporation for the East Pande block, south of Dar es Salaam.

This would be RakgasRakgas' first acquisition outside the UAE but the company is increasingly looking elsewhere.

In late October,RAK Crown Prince Sheikh Saud Bin Saqr Al-Qasimi signed a memorandum of understanding with Najaf province governor Assad Al-Taie that could bring RakgasRakgas andRas Al-Khaimah Petroleum, created in 2005, into Iraq.

Dana and Centurion
In mid-November Sharjah-based Dana GasDana Gas announced an agreement with Canada's Centurion Energy, to acquire the Toronto Stock Exchange and AIM-listed Company for $1.02bn. Centurion has assets in Egypt, Tunisia and offshore West Africa. This is Dana's 20% owned by UAE company Crescent Petroleum first major acquisition.

Dubai EnergyDubai Energy: entrepreneurial state company
Dubai EnergyDubai Energy was launched in June 2005 as part of Dubai HoldingDubai Holding, with the aim of building a diversified global energy investment portfolio and further strengthening regional and international alliances as the emirate's ruling Al-Maktoum family profited from an upturn in their fortunes as the Dubai real estate play had started to generate large amounts of money.

Dubai HoldingDubai Holding was itself established in October 2004 to manage the emirate's growing project portfolio and is government controlled but with none of the inertia that term usually implies, reflecting the business dynamism of Dubai Ruler Sheikh Mohammed Bin Rashid and his team.

Dubai EnergyDubai Energy's most notable initiative so far is the Dubai Mercantile Exchange (DME)Dubai Mercantile Exchange (DME) joint venture with the New York Mercantile Exchange (Nymex). DMEDME is initially expected to trade sour crude and fuel oil, and will be based in the Dubai International Financial Centre, a financial free zone.

© Gulf States Newsletter 2006