The burning question of gas flares

The burning question of gas flares Chris Stanton May 22, 2010 It is one of the bitter ironies of the Gulf energy industry that it burns huge volumes of natural gas as waste despite a power crisis in the region and increasing global pressure on natural resources and the environment. Topic Dolphin Energy General Electric The Middle East as a whole ranked second in the world last year for wasting natural gas by burning it off instead of using it for power stations and industry. Each year, countries surrounding the Gulf flare 27 billion cubic metres, according to satellite data from Global Gas Flaring Reduction, an international organisation supported by the World Bank. That staggering sum is 30 per cent more than the UAE imports from Qatar through the Dolphin pipeline and is sufficient to supply a liquefied natural gas (LNG) plant with enough gas to produce 18 million tonnes per year for export, worth more than US$9.6 billion (Dh35.2bn) at current prices in Japan, the biggest market. As countries in the region face gas shortages and international criticism for their emissions of greenhouse gases, eliminating the waste should be the first logical step of any energy policy, experts say. "Gas flaring reduction is not just a technical issue that oil producers have to deal with, but it's a relevant solution in today's energy debate," says Paulo de Sa, the manager of the oil, gas and mining division at the World Bank. "Some countries use heavy fuel oil for power generation while still flaring associated gas. Generating electricity with gas that would otherwise be flared contributes to improving access to energy in the most efficient way possible." The practice of flaring only increases the region's carbon footprint, emitting about 80 million tonnes of carbon dioxide per year, based on World Bank figures, slightly more than the carbon emissions of Austria. Globally, flaring emits 400 million tonnes of carbon dioxide, roughly equivalent to the carbon emissions of France. Ending the practice in Iraq alone, which is planning to increase oil production as much as five-fold in the next two decades, would prevent forecast emissions of tens of millions of tonnes of carbon from entering the atmosphere, says Mounir Bouaziz, a vice president for new gas business at Royal Dutch Shell, the oil giant. "There are one or two elephants we can chase," he says. "The example of Iraq, we are talking about the equivalent of taking more than 4 million cars off the road, or reducing the amount of cross-Atlantic flights by 100,000 flights per year." Russia and Nigeria are the worst offenders, followed by Iran and Iraq. The oil industry is well aware of the arguments against flaring and is often quick to agree that action is needed, but say economic and logistical challenges stand in their way. Oil companies flare or vent gas when they lack the pipelines and other infrastructure to move it to where it can be used. Often, they say they are forced to flare because the source is a remote oilfield that is too small or far away from major infrastructure to make it practical to capture the gas. In such cases, additional investment is needed to make the capture of gas possible, they say. Gas also is flared at refineries as well as LNG and chemical plants as a safety mechanism to prevent a sudden rise in pressure. At Oman LNG, which operates a plant near Sur, flaring remains "a very important element of ensuring process safety", said Brian Buckley, the chief executive of the company. Oman is responsible for about 1.5 per cent of the gas flared worldwide, putting it in the top 20 flaring countries. It is joined on the list by Iran, Iraq, Kuwait, Qatar and Saudi Arabia. Page 2 of 2 The sultanate has reduced the practice by 25 per cent in the past five years, Mr Buckley says. John Malcolm, the managing director of Petroleum Development Oman, the country's largest oil company, plans to halve flaring in four to five years. In Qatar, Maersk Oil Qatar, a joint venture between the Danish company Maersk and Qatar Petroleum, has cut flaring from 5.6 million cu metres to 1.1m cu metres on the Shaheen oilfield, even as it expanded production, said Sheikh Faisal Al Thani, the acting managing director. "It shows you can [produce] more oil and less flaring," he said. Qatar Petroleum would encourage more flaring reduction projects, but was not ready to set a firm target at all its fields, said Saif al Naimi, the company's director of health, safety and environment regulation and enforcement. The UAE is the only major oil producer in the region not on the top 20 list, following the success of a dogged government policy in Abu Dhabi that has reduced flaring by the Abu Dhabi National Oil Company (ADNOC) by 98 per cent since 1990, said Ali al Jarwan, the general manager of Abu Dhabi Marine Operating Company (ADMA-OPCO), an offshore division of ADNOC. "If the gas plant is not available, we do not flare," he said. "If we don't have facilities we shut down production and we think about recovering production the next day or next week." Now ADMA-OPCO is looking to shift from minimal flaring to a zero-tolerance approach in five to seven years, he said. Initial rapid gains were a result of simple fixes such as better co-ordination between drillers and gas plant operators, but extinguishing the last flares will require large capital investments. Some of those investments may not prove cost-effective on their own, Mr al Jarwan noted, but were required by government policy. Across the wider region, many flaring reduction projects need an extra funding stream to offer sufficient returns to investors. International carbon credit schemes organised by the UN Clean Development Mechanism are one option, but the process is cumbersome and the rewards too uncertain for investors. So far only two flaring reduction projects having received credits since the programme began in 2005. Ultimately, projects across the region need another boost, which could and should come as part of a new international treaty on climate change under discussion this year, says Sam Nader, the director of Masdar Carbon, a division of the Abu Dhabi Government's clean energy company. "Gas-flaring reduction should be among the first to be considered for finance by the international treaty under the global agreement," he says. "The two most important goals in this decade are energy efficiency and energy access, and gas flaring meets both. You have energy access, access to saved gas and mainly these are developing countries that can make use of the gas for their communities … secondly, energy efficiency, optimising your hydrocarbon production." For Abu Dhabi, one of the largest oil exporters in the world, gas flaring reduction also meets a third priority, he says, which is to clean up the hydrocarbon industry. "Prolonging the life of the hydrocarbon industry is of prime concern to us in Abu Dhabi," he says.cstanton@thenational.ae Read more: http://www.thenational.ae/thenationalconversation/industry-insights/energy/the-burning-question-of-gas-flares#ixzz2IVjxwpD5 Follow us: @TheNationalUAE on Twitter | thenational.ae on Facebook =========== UPDATE 3-Dana creditors talk tough after Islamic bond miss Thu, Nov 01 09:53 AM EDT * Dana says in talks to amend, extend sukuk terms * Bondholders to claim Dana's Egyptian assets - source * Company missed $920 million outstanding payment on Wednesday * Shares suspended on Abu Dhabi bourse By Dinesh Nair DUBAI, Nov 1 (Reuters) - The United Arab Emirates' Dana Gas failed to repay a $920 million Islamic bond on maturity, prompting a source close to holders of the bond to say they will stake claim to the natural gas producer's extensive Egyptian assets. Dana, a leading Middle East natural gas company, said on Thursday it was in talks with bondholders to amend and extend the terms of the bond, or sukuk, after it became the first firm from the UAE not to repay a bond on maturity. But a source close to the creditors said Dana sukukholders are determined to go after the assets used to back the issue. "Bondholders will now pursue an enforcement of Egyptian assets and pursue their unlimited recourse $1 billion claim against Dana Gas PJSC," the source said, declining to be named. Dana has operations in Egypt and Iraq, is listed on the Abu Dhabi stock exchange and is headquartered in the emirate of Sharjah. The Abu Dhabi bourse suspended Dana shares on Thursday, pending clarification on the Islamic bond. Although indebted firms in the Gulf Arab state have extended maturities on billions of dollars in bank loans since the onset of the world financial crisis of 2008-09, no sukuk have been restructured or unpaid on maturity. There are very few private corporate bonds or sukuk outstanding in the UAE, as most issuance has so far been from the state, or state-linked entities, and financial institutions. Other bonds and sukuk in the Gulf Arab region did not appear to be affected by the non-payment of Dana's sukuk. Islamic finance, launched in its modern form in the 1970s and estimated to have global assets of over $1 trillion, offers investments that comply with Islamic law which bans interest or investing in industries that involve gambling or alcohol. Sukuk are one of Islamic finance's highest profile products. Some in the industry claim sukuk are safer than traditional bonds because they are effectively certificates of ownership in a real asset and not pure debt. The Dana saga is not expected to have any significant impact on sukuk issuance or prices because the firm, a relatively small one compared to other issuers, is seen as a special case not representative of Gulf economies which are growing strongly. Dana, which is privately owned, is not seen as a strategic entity for the UAE so any government support is unlikely. NO MAJOR CONTAGION

"We haven't seen any major contagion in the Gulf bond and sukuk markets from this news. Frankly, institutional investors appear to be taking this in their stride," Chavan Bhogaita, head of markets strategy at National Bank of Abu Dhabi, said. "Telling investors that they have successfully paid all coupon payments thus far and are committed to a consensual arrangement is pretty lame. Bottom line is that they (Dana) didn't pay the $920 million that was due yesterday," Bhogaita said. Dana has a three-day grace period to make the payment but "appear unlikely to do so," the source added.

The UAE's largest listed natural gas firm, hit by payment delays from Egypt and Iraq's Kurdistan region, said it had also missed an $18.75 million accrued profit payment due Oct. 30 on the five-year sukuk, issued with a 7.5 percent coupon. It had repurchased $80 million of the $1 billion bond in 2008. Dana said it had paid $356 million to bondholders over the last five years. "Dana Gas is in ongoing discussions with an ad-hoc committee of sukuk holders over terms to amend and extend the sukuk," it said in a bourse statement. Bondholders have yet to issue a formal statement. The convertible sukuk has gained global interest as most of the debt is said to be owned by big investment firms including BlackRock Inc and Ashmore Group. The sukuk is secured against Dana's Egyptian operations, Sajaa Gas Private Ltd, a gas processing and sweetening plant in Sharjah, and United Gas Transmissions Co, a pipeline project to supply Iranian gas which is yet to start up. Sources told Reuters on Tuesday that Dana would not repay the sukuk on the Oct. 31 maturity. They said the two sides had entered a so-called standstill, valid for up to six months, in early October to allow talks to continue. PAYMENT DELAYS Dana's problems worsened in 2011 after political unrest in the region led to payment delays from Egypt and Iraq's Kurdistan region. It had outstanding receivables of 754 million dirhams ($205 million) in Egypt and 1.33 billion dirhams in Kurdistan as at Sept. 30. Dana said liquidity challenges, mainly due to non-payments from Egypt and Kurdistan, are "short term" and it is committed to finding a consensual solution with the bondholders. In May, Dana said it had hired Blackstone Group, Deutsche Bank and law firm Latham & Watkins as advisers. Investors have hired Moelis and law firm Linklaters. Dana's shares and sukuk have been under pressure on investor worries of non-payment of the outstanding bond. The sukuk, which is lightly traded, was quoted at 66 cents to the dollar according to prices from Nomura Holdings, unchanged from Wednesday's close. It was quoted at 78 cents to the dollar earlier in the week but slumped after reports of non-payment. "This was well-flagged and with the restructuring, sukuk holders will be looking at any way Dana can monetise its assets," said Amer Khan, fund manager at Shuaa Asset Management. In a separate statement, Dana said its third-quarter net profit fell 27 percent to 104 million dirhams from 143 million dirhams a year ago. Its cash balances stood at 516 million dirhams as of Sept. 30. Revenue for the period fell 21 percent to 512 million dirhams, due to a decline in Egypt production and lower hydrocarbon prices, Dana said. ============== Regulation & Environment: Australia’s coalseam-to-LNG companies stand up By News Desk | May 20, 2013 12:01 AM Comments (0) Companies looking to turn Australian coalseam gas into LNG for export are facing increasing resistance from environmental groups. In this week’s Regulation & Environment column in Oilgram News, Christine Forster discusses how producers are pushing back. ——————————– Some of the companies building massive new coalseam gas-to-LNG projects in the eastern Australian state of Queensland have gone on the front foot to counter what they describe as anti-development activism. BG subsidiary QGC has been particularly vocal among the players, who are fighting back against criticism in social and traditional media of the rapidly expanding industry’s environmental footprint. QGC is building the $20.4 billion Queensland Curtis LNG project on Curtis Island in Gladstone. The 8.5 million mt/year facility will be the world’s first CSG-based LNG plant when it starts up in 2014. Two other LNG plants are being constructed on Curtis Island. All three will be fed with CSG from thousands of wells in Queensland’s Bowen and Surat basins. Origin Energy and ConocoPhillips are developing the $24.7 billion Australia Pacific LNG project, with a capacity of 9 million mt/year, and a Santos-led group is working on the 7.8 million mt/year Gladstone LNG plant. Those two facilities will start up over 2015-2016. In recent weeks, QGC has railed against federal government plans to regulate CSG projects which impact water resources, and to monitor fugitive emissions from CSG wells. BG Group Australia Chairman Catherine Tanna, at a recent speech to the American Chamber of Commerce in Australia, criticized increasing regulation of the industry, pointing at the federal government’s planned changes to its Environment Protection and Biodiversity Conservation Act to include a so-called “water trigger.” That move took the industry by surprise, coming as an additional layer of regulation on top of the requirements of the state governments. The EPBC Act amendments, proposed by the Labor government of Prime Minister Julia Gillard, were debated in the Senate on May 14 and look set to be passed with support from the Green party and unaligned parliamentarians. The opposition Liberal National Party Coalition opposes the bill. “The gas industry has been criticized on many fronts,” Tanna told the AmCham event. “Very occasionally that criticism is warranted and the industry has been quick to remediate. A lot of what is said, though, is highly questionable, and propagated without challenge to the point where activism determines public policy; where the tail wags the dog.” ——————————–

Tanna argued that rather than “poisoning” aquifers, and “alienating” farm land, the CSG industry reduced the pressure on stressed aquifers by purifying salty coalseam water and providing it to farmers and local towns. “It is water that otherwise would not be available for any use,” she said. “If these proposals were, therefore, designed to protect Australia’s water resources, they fail on this logic alone. They were clearly not introduced to deal with an environmental problem. They were introduced to appease activists.” “That is a measure of what is at stake when we have decision making on this basis; when green activists and their supporters deliberately misinform; and when motives and charges go unquestioned and unchallenged,” Tanna said. “Just as it is right that our industry be scrutinized and held to account, so, too, should our critics.”

QCLNG will add $32 billion to the Queensland economy in its first 10 years. QGC has also hit out at proposed federal regulations to measure fugitive emissions of CSG from gas production, saying the costs of implementation outweigh any environmental or revenue gain. The regulations, to be introduced from July 2013, have been applied after nearly a year of public consultation during which the government received only 17 submissions, with gas companies given just a month to comment, QGC said. Santos has also pitched into the debate, running newspaper advertisements last month in response to a critical report on high-profile Australian Broadcasting Corporation television program 4 Corners. “The Santos GLNG project in Queensland was subject to an extremely comprehensive environmental approval process,” CEO David Knox said in the advertisement. “Rather than being rushed, as claimed by 4 Corners, this process took over four years to complete between 2007 and 2010, involved 20,000 pages of environmental submission and resulted in 1,200 specific environmental conditions.” The upstream peak industry body is also campaigning hard, releasing a steady stream of statements refuting the environmental lobby’s claims, including its “shameful scare campaign” on the human health impacts of the CSG industry. But the industry might soon get its wish, with a return to a streamlined approvals process concentrated in the hands of the states. That is the system backed by the federal LNP opposition, widely tipped to oust the minority Gillard government in a general election scheduled for September 14 this year. –Christine Forster in Sydney

MIDEAST DEBT-Turkey's debut sukuk struggles after Gulf over-allocation

Definition of 'Sukuk' An Islamic financial certificate, similar to a bond in Western finance, that complies with Sharia, Islamic religious law. Because the traditional Western interest paying bond structure is not permissible, the issuer of a sukuk sells an investor group the certificate, who then rents it back to the issuer for a predetermined rental fee. The issuer also makes a contractual promise to buy back the bonds at a future date at par value. Investopedia explains 'Sukuk' Sukuks must be able to link the returns and cash flows of the financing to the assets purchased, or the returns generated from an asset purchased. This is because trading in debt is prohibited under Sharia. As such, financing must only be raised for identifiable assets. Read more: http://www.investopedia.com/terms/s/sukuk.asp#ixzz2EkTSLRPo MIDEAST DEBT-Turkey's debut sukuk struggles after Gulf over-allocation Thu, Oct 11 08:04 AM EDT * Middle East allocated much more of sukuk than expected * Secondary market trading below par since soon after issue * Relatively small number of Gulf investors may have bought it * They appear to have ended up with big over-allocations * Political, strategic motives may lie behind allocation By Rachna Uppal and Mala Pancholia DUBAI, Oct 11 (Reuters) - Turkey's first sovereign sukuk issue was a public relations triumph but it's been a financial disappointment so far in the secondary market, showing the risks of over-allocating debt deals to a single region. The $1.5 billion Islamic bond, maturing in 2018 and issued at a profit rate of 2.803 percent, dropped to about 98 cents on the dollar in the secondary market soon after issue in mid-September and has stayed below par since then. Traders say bids have ranged between 99.0 and 99.5 cents in the past few days. It was bid at 99.5 cents on Thursday to yield 2.9 percent, according to Thomson Reuters data. As Turkey's first official foray into Islamic finance, the sukuk issue was closely watched by investors around the world, drawing 250 separate orders totalling over $7 billion. The successful sale paved the way for Turkey to raise 1.62 billion lira ($905 million) with a local currency-denominated sovereign sukuk two weeks later. The historic nature of the dollar sukuk, however, may have blinded some buyers to risks such as a last-minute upsizing of the issue and an overwhelming allocation to a single region, the Middle East. "Whilst we are comfortable with Turkey as a credit, we avoided the issue as there was no clarity on the size or pricing until the last minutes of the deal," said Mark Watts, head of fixed income in the asset management group at National Bank of Abu Dhabi. "When buying any asset, clarity of price and size of supply are key. Turkey priced aggressively, a good deal for them, but it left little on the table for investors and slipped below its issue levels after a short period." UPSIZED Turkey, rated BB by Standard & Poor's, was initially expected to raise between $500 million and $750 million from the issue, or up to a maximum of $1 billion, several regional investors who attended roadshows told Reuters. But the issue was expanded to $1.5 billion in the closing hours, even as price guidance continued to tighten - in contrast to the usual pattern of a substantial upsizing causing some widening of the pricing. Another surprise was the huge allocation to the Middle East. Traditionally, Gulf investors have focused on their own region, where yields are relatively high relative to credit ratings. So an allocation of well under half of the Turkish sukuk to the Middle East would have seemed reasonable. But the Turkish sukuk was sold 58 percent to the Middle East, 13 percent to Europe, 12 percent to Asia, 9 percent to Turkey and 8 percent to U.S. investors. The small Asian allocation was particularly shocking, since Malaysia is one of the biggest sources of demand for sukuk globally. Many major investors in the United Arab Emirates, both Islamic and conventional, have told Reuters they did not put in orders for the Turkey deal. They cited various reasons, including unusually tight pricing for a first-time, sub- investment grade issuer. The implication is that a relatively small number of investors in the Gulf ended up with considerably more of the sukuk than they had expected. In most deals, investors bid for more of a bond than they think they will be allocated, on the assumption that actual distribution of the bond will be proportional to their share of the total bid. In this case, Turkey seems to have skewed its allocation in favour of Middle Eastern bids. "It was quite expensive and over-allocated. A lot of bidders went in with conditional orders, above a certain spread, 200 (basis points over midswaps) mostly," said a regional trader who declined to be identified. STRATEGIC Turkish government officials declined to comment on their motivations for the allocations, but many market participants think they may have had political and strategic motives. Turkey decided to allocate a big chunk of its maiden sukuk to the Middle East in an effort to develop a new investor base and help cement growing business ties with the Gulf, these market participants say. The sukuk prospectus said negotiations for a Free Trade Agreement between Turkey and the six members of the Gulf Cooperation Council were underway. Meanwhile, Turkey's Islamist-rooted government wants to develop Islamic finance, for which the Gulf is a principal centre. And a congress of Turkey's ruling AK Party this month made clear that the country was focused on expanding ties with the Middle East and the Islamic world, rather than the West, which was barely mentioned. "From a sociopolitical perspective, Turkey is looking East rather than West," said a regional debt capital markets specialist. Although some Gulf investors ended up holding more of the sukuk than they had expected and now want to sell, there was also interest in the issue among strategic investors in the Gulf, bankers said - which suggests the sukuk may not have much further downside in price. Gulf investors have been increasing their investment in Turkey in areas such as private equity and real estate. Bankers said some of these investors saw the Turkish sovereign sukuk as a way to hedge against their private sector risk in the country. "You have to look at it as hedging. Gulf investors have invested massively in Turkey in the last 12 months, so buying into the sukuk is a way of hedging Turkish exposure," said a Gulf-based banker. There is also speculation that some of the Gulf's sovereign wealth funds may have put in big orders for the Turkish sukuk, which could account for part of the heavy allocation to the Middle East. Supranational institutions and central banks took 10 percent of the sukuk globally, according to the breakdown of investor types. Sovereign funds are generally conservative investors which do not normally invest in non-investment grade instruments, and have shown little interest in sukuk. However, several regional capital markets sources said they understood Turkish officials held one-on-one meetings with regional sovereign wealth funds in Qatar and Saudi Arabia before the issue. The deal was lead-managed by Citi, HSBC and Liquidity House, a unit of Kuwait Finance House. Qatar's Barwa Bank, in which Qatar Holding, the investment arm of the Gulf state's sovereign wealth fund, owns a 12.1 percent stake, was added as co-lead manager late in the process. (Additional reporting by David French in Dubai and Nevzat Devranoglu in Istanbul; Editing by Andrew Torchia)

Debt capital markets: unexplored territory as yet

By Ali Wahab Published: November 19, 2012 Looking at the recent ratings downgrade by Moody’s, one can be quite certain that the bottom in our credit ratings has been reached. DUBAI: In the summer of 2011, the Government of Pakistan planned on issuing Oil and Gas Development Corporation (OGDC)-backed exchangeable bonds worth $500 million. Roadshows were held in cities like Abu Dhabi, Singapore, Kuala Lumpur, Zurich and London. The transaction, if it had gone through, would have been Pakistan’s first foray into the debt capital markets since 2005. In January 2005, Pakistan raised $500 million at a 6.75% fixed return in the form of a Sukuk issue, which at that time was priced at the London Interbank Offering Rate (LIBOR) + 3.75%. This Sukuk bore the brunt of the financial crisis in 2008 and 2009, when it traded as low as $45 per unit, or at a 55% discount. This was during the time when Pakistan was facing a severe capital crisis in the form of low forex reserves, flight of capital. Approaching the International Monetary Fund (IMF) then was the right thing, because by becoming part of the programme, some element of discipline was instilled in economic management. Despite all the troubles, the Government of Pakistan successfully repaid the Sukuk on time, and in full. Those who had taken the risk when our Sukuk was trading at its lowest must have been amply rewarded. Since then, Pakistan has exited the IMF programme for want of reforms that have not been implemented, while substantial repayments are due in the next three fiscal years. On top of that, the much needed increase in taxation to cover fiscal requirements has not been very successful. In essence, our state’s fiscal deficit management has largely depended on externalities like Coalition Support Funds, receivables from privatisation proceeds like Etisalat, remittances, and borrowing internally through the National Saving Schemes and the banking system. One area that has been completely ignored is external debt capital markets (DCMs). Out of our $58 billion public external debt, only $1.55 billion is raised from DCMs, with two bonds due in 2016 and 2017, and one due in 2036 with an average coupon of 7.15%. As an investment banker, I felt positive when Pakistan was approaching DCMs last year using the exchangeable bonds route of OGDC. Having a rating of B- from Standard & Poor’s and a Ba3 from Moody’s, it would have been an interesting test to see how we are treated in international markets. Even if we had raised money between the range of 9-10% per annum, it may not have been a bad idea. Regular repayment over a course of time, and approaching the capital markets through the establishment of a programme, keeps you in the eyes and minds of investors: as they say “out of sight is out of mind” – Pakistan is a perfect example of the same in credit markets. As Pakistan currently doesn’t have a proper plan to tap credit markets in the form of bond/Sukuk issues, or approaching multilateral institutions including IMF, we are prone to possible downgrades. Moody’s downgraded Pakistan in July from Ba3 to Caa, Pakistan’s lowest credit rating since 1998, citing upcoming payments to the IMF in fiscal 2013 to 2015 as a major reason for the downgrade. Looking at the recent downgrade, one can be quite certain that the bottom in our credit ratings has been reached. What better time to establish a DCM programme and plan accordingly? The reason why it is the ideal avenue right now is that with regular rounds of quantitative easing, banks have the ability to go after cheap money chasing assets. Also, with interest rates having come down and likely to remain low till 2015, there is a greater incentive for borrowers to issue liquid instruments; while for investors, the absolute returns offered by emerging markets allows money to follow. As a case in point, the Republic of Turkey sought to raise as much as $5.23 billion from external borrowings in 2012. They have exceeded their target and raised more than $6.1 billion by tapping into the highly liquid bonds and Sukuk market. On September 18, 2012, the Republic of Turkey issued their first ever sukuk worth $1.5 billion, for which they attracted orders of a multiple of six times at a pricing of 2.80% and a 5.5 years tenure. One can see the impact of reducing rates and higher liquidity in that, earlier in January and February, Turkey raised $2.5 billion in the form of 10.5 year bonds at a pricing of 6.25%. By raising more money than they budgeted, they have smartly reduced their average cost of borrowing. Mind you, Turkey is also not investment grade, and has a rating of BB from S&P and Ba1 from Moody’s. Just look at the difference in the perceptions of Turkey and Pakistan. I am sure many would have assumed that Turkey is investment grade. A simple problem that we can be sure of is that we are bad marketers of Pakistan. Pakistan has to plan its forays into debt capital markets and become a regular issuer. That is the only way the business world will again become receptive to Pakistan. The usual problems of terrorism, honour killings and problems with the Taliban all give us a bad name which we can certainly do without. A UAE based investment banker who can be contacted at ali.wahab@tribune.com.pk Published in The Express Tribune, November 19th, 2012.