The Dubai Mercantile Exchange Limited (DME), initially a joint venture between Tatweer, a member of Dubai Holding, and the New York Mercantile Exchange Inc., (NYMEX), announced today that it has concluded a transaction with the Oman Investment Fund (OIF) to sell a 30% equity stake in the Exchange.
This transaction follows the announcement by Oman's Ministry of Oil & Gas that Oman will adopt forward pricing of its crude oil based on the daily settlement price of the DME's Oman Crude Oil Futures Contract, due to start trading on launch of the Exchange on June 1, 2007. The Oman Crude Oil Futures Contract was developed by the DME to offer the industry a new tool for managing risk through greater transparency. The benchmark contract was finalised after almost two years of analysis of the fundamentals of the Middle East sour crude oil market, and further consultation with over 75 market participants comprising of National and International Oil Companies, producers, end users, energy trading companies and brokers.
Saeed Al Muntafiq, Chairman of Tatweer, commented: "We are delighted to welcome the Oman Investment Fund as a partner in this historic venture. The acquisition of a 30% stake in the DME further validates our strong and visionary business model. Oman's confidence and support for the DME, as reflected by this announcement and the continuation of Dubai's role in developing this Exchange underscore the true significance and impact the DME is expected to have on the future pricing of Middle East sour crude oil."
NYMEX Chairman Richard Schaeffer said, "NYMEX is gratified to have the Omani government join us as partners in this exciting venture. Their support has been critical in the creation of the new benchmark Omani crude oil futures contract."
H.E Ahmed bin Abdulnabi Macki, Chairman of the OIF commented: "The Oman Investment Fund is pleased to participate as a strategic partner in developing the Dubai Mercantile Exchange and we are also excited that the Exchange will use the new benchmark Oman Crude Oil Futures Contract. The Sultanate of Oman views this as a significant milestone for the fast growing financial markets of the region."
Ahmad Sharaf, Chairman of the DME, concluded: "This is a truly significant landmark in the development of the DME and further demonstrates the valuable and long-standing relationship between Oman and Dubai. Working with our partners, we are establishing a world-class Exchange that will leverage the regional and industry knowledge of Tatweer, the Oman Investment Fund and NYMEX. All our efforts are now focused on continuing to move towards the successful launch of the Exchange."
The DME continues to be overwhelmed by the support and confidence that it is receiving from the industry. To date, over 50 Members and more than 20 Market Makers have been approved by the DME Membership Committee, and the leading ISV's have connected to DME Direct™. The DME is committed to administering a fair market for producers, consumers and traders when it launches on June 1.