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The Sultanate of Oman’s Ministry of Finance (MOF) today announced that it has reached a consensus for agreement with the Dubai Mercantile Exchange Limited (DME) to acquire a 30% equity stake in the DME, the Middle East’s first energy futures exchange.
With the conclusion of the equity investment in the DME, through the government backed Oman Investment Fund, Oman will join the Exchange as a strategic partner and key stakeholder adding further support to an already powerful partnership between the New York Mercantile Exchange, Inc. (NYMEX) and Tatweer, a member of Dubai Holding.
The financial terms of the acquisition have not been disclosed, and are subject to the Dubai Financial Services Authority approval
Commenting on the announcement, H.E. Ahmed Macki, Minister of National Economy and Deputy Chairman of Financial affairs and Energy Resources Council of the Sultanate of Oman said: “We are delighted to join together with NYMEX and Tatweer as partners in the Dubai Mercantile Exchange. We have been collaborating closely for some time with the DME and its management team in the creation of a successful, physically backed Middle East sour crude oil futures contract. Our investment would be part of a long term commitment to the DME and an affirmation of our confidence in the success of the region’s first energy futures exchange. In addition, our participation in the DME will strengthen the strong relations between Oman and UAE and create economic synergy among the two countries. With the conclusion of the agreement, we are now placed to not only support, but participate in this groundbreaking initiative, particularly in light of Oman’s historic role in the pricing of Middle Eastern crude.”
Ahmad Sharaf, Chairman of the DME, added: “The Sultanate of Oman is much more than an equity investor in the DME. Oman’s strategic support towards the development of a transparent, regulated and robust Middle East sour crude oil benchmark is the extension of an already established franchise which Dubai and Oman share in Middle East crude oil pricing. We are extremely pleased to welcome the Sultanate of Oman as equity partners in the DME, further enhancing our cooperation and Oman’s participation in the creation of the region’s first energy futures exchange. Together, we will seek to establish a world-class Exchange that not only leverages the regional and industry knowledge of Oman, NYMEX and Tatweer together but one that also builds on the valuable and long-standing relationship between Oman and Dubai. This is truly a milestone for the DME as well as the industry as we continue to strengthen the Exchange and move toward its successful establishment.”
The unique collaboration between Oman and the DME began in February of 2006, since which time the two parties, in conjunction with the industry, have successfully created the Oman Crude Oil Futures Contract, which will be listed on the DME upon launch of the Exchange.
The establishment of an exchange inside the Dubai International Financial Centre (DIFC) and the associated clearing and settlement services to be provided by the NYMEX Clearinghouse are subject to regulatory approval from the Dubai Financial Services Authority (DFSA) and the licensing of the DME as an Authorised Market Institution (AMI) to operate as an exchange.
