Mysterious Saudi Group at Center of Canadian Oil Field Project Lacks Clear Financial Muscle

Strategic Insights -

The development of oil fields in southern Sudan by a Canadian-led project, spearheaded by Vancouver-based Arakis Energy Corp., has raised suspicions due to the lack of transparency surrounding the key players involved. Arab Group International (AGI), a Saudi group touted as the financial savior of the project, is proving difficult to track down, with its existence and activities shrouded in mystery. The company claims it will provide the necessary $750 million by September 15, but its legitimacy and financial muscle are being questioned.

Key Takeaways:

  • AGI, the Saudi group behind the project, is not registered with the Saudi Ministry of Commerce, and the Riyadh Chamber of Commerce has no record of its activities, despite claims of significant financial muscle.
  • AGI shares the same Riyadh address as Al-Aqaleem Contracting Establishment, a Saudi-registered business owned by Prince Sultan Bin Saud Bin Abdullah al-Saud, but AGI has no apparent operations in Saudi Arabia.
  • The company's director, Haroun al-Haroun, states that the Riyadh office is used for correspondence, but the company's activities are based in Sudan, including offshoots Ricco Trucking and Regency Construction.
  • The name AGI is not used in Sudan except in relation to the oil field project, suggesting a lack of local presence and legitimacy.
  • Arakis' stock has taken a hit due to warnings from the rebel South Sudan Independence Movement (SSIM) and the Sudan People's Liberation Army (SPLA) to drop the scheme, which has led to a 31/32 drop in stock value to 18 1/2 on Nasdaq.
  • The formation of AGI is said to have occurred about a year ago, largely with the aim of raising money from a number of Saudis for the Arakis project.
  • Various financiers from a background in international oil field projects have been contacted over the past year, but no deal has been finalized.

Statistics:

  • $750 million: The amount required to rescue the project, according to Arakis Energy Corp.
  • 15 September: The date by which AGI claims to provide the necessary funds for the project.
  • 950 miles: The length of the oil pipeline involved in the project.
  • 31/32: The drop in Arakis' stock value due to warnings from the rebel group.
  • 18 1/2: The current stock value of Arakis on Nasdaq.

Sources:

  • "The Oil Daily"
  • Prince Sultan Bin Saud Bin Abdullah al-Saud, Owner, Al-Aqaleem Contracting Establishment
  • Haroun al-Haroun, Director, Arab Group International (AGI) and Al-Aqaleem Contracting Establishment
  • Arakis Energy Corp.