The Dubai Mercantile Exchange (DME) today announced recent developments in the creation of a new commodity exchange that will initially develop and trade a Middle East Sour Crude Oil Futures contract in the heart of the world’s largest hydrocarbon province.
The DME aims to meet the growing market need for price discovery of Middle East Sour Crude Oil whilst simultaneously addressing the time zone gap between Europe and Asia by providing a hub for the trading of energy futures, options and other products.
Amongst these key recent developments are:
• The naming of an eight-member Board of Directors comprising of senior executives from the joint venture partners - Dubai Holding and the New York Mercantile Exchange, Inc. (NYMEX)
• Plans to adopt an electronic trading platform
• The launch of an international marketing drive to commence at the Cambridge Energy Research Associates (CERA) Conference in Houston, Texas in February 2006
The DME Board consists of the Chairman Ahmad Sharaf, Senior Vice President, Tatweer; Deputy Chairman Fadel Al Ali, Chief Financial Officer and Chief Operating Officer of Dubai Holding; NYMEX President James E. Newsome; Soud Ba’alawy, Chief Executive Officer of Dubai Investment Group; Rashed Al Ansari, Principal Executive of Dubai Holding; NYMEX Executive Committee Member Scott Hess; and NYMEX board members Stephen Forman and John McNamara.
The DME Board has approved the implementation of an electronic trade matching engine. The arcade trading forum will be physically located in the Dubai International Financial Center (DIFC), a free trade zone.
These and other developments will be communicated to the industry and key market participants as the DME launches its international marketing drive in February. This drive will commence in Houston at the world’s premier conference on the future of energy, which is organised by CERA and attended by the world’s leading energy executives and policy makers. DME’s participation at CERA marks the first in a series of initiatives to inform the marketplace of the DME’s progress and the benefits it will bring to a global customer base.
Commenting on today’s announcement, DME Chief Executive Officer, Gary King, said: “We are pleased with the progress we are making and the positive feedback that we have received from the market since the announcement of the joint venture in June 2005.
“With the appointment of such an experienced board, a strong senior management team in place and growing industry consensus that there is a significant opportunity for the DME and its products and services, we are confident of success.”
He added: “The establishment of an exchange and the securing of a new Middle East Sour Crude Oil Futures contract is a complex process. However, in line with the guidance that we have given our potential customers, we expect to meet our stated goal of a launch in the fourth quarter of 2006. ”
- The DME will be based in the Dubai International Financial Centre (DIFC), a financial free zone designed to promote financial services within the UAE.
- The DME will be regulated by the Dubai Financial Services Authority, a regulatory body established within the DIFC and charged with the creation of a world-class regulatory regime which promotes integrity, transparency and efficiency.
DME Board biographies
- Mr. Sharaf was appointed Chairman of the Dubai Mercantile Exchange in June 2005. He began his career with Dubai Petroleum Co. and continued with ConocoPhillips, where he was Vice President of Business Development (Middle East) and country manager for Saudi Arabia. Mr. Sharaf has also held various senior technical and commercial responsibilities in the Middle East and internationally. He earned a Masters degree in Business Administration from Duke University's Fuqua School of Business. He also has holds a Masters of Science and a Bachelor of Science degree in Petroleum Engineering from the Colorado School of Mines.
- Mr. Al Ali was appointed Chief Financial Officer of Dubai Holding in September 2004 and subsequently also Chief Operating Officer of Dubai Holding in January 2006. He is responsible for corporate governance, treasury, and finance for the group. Prior to this, he served as the head of the United Arab Emirates distribution at Citibank in Dubai. In his more than 16 years with Citigroup, Mr. Al Ali worked in consumer credit management, financial control, sales and distribution, and strategic planning. He holds a Bachelor of Science degree in Industrial and Systems Engineering from the University of Southern California and a Certificate of Finance from the American University of Sharjah.
- Dr. Newsome has been president of NYMEX since August 2004. Prior to that, he served as Chairman of the Commodity Futures Trading Commission (CFTC) since his Senate confirmation in December 2001. He was a Commissioner of the CFTC from August 1998. Dr. Newsome received his Bachelor of Science degree in Food and Resource Economics from the University of Florida and his Masters of Science and Doctorate of Philosophy degrees from Mississippi State University.
- Mr. Ba’alawy is Chief Executive Officer of the Dubai Investment Group and a member of the Executive Committee of Dubai Holding. He joined the group in 2000 and has served as Chief Investment Officer of Dubai Internet City and Vice President of the Executive Office. Mr. Ba’alawy worked with Citibank for 10 years, where he was appointed Gulf Treasurer, Vice President in Dubai. He serves on the boards of the Dubai Islamic Insurance and Reinsurance Company and the E-Millennium Private Equity Fund. He is also the Chairman of Manzil, a non-profit center for individuals with special needs and a member of the Chartered Institute of Management Accountants.
- Mr. Al Ansari is the Principal Executive of Dubai Holding, where he coordinates the commercial affairs of the more than 40 diverse companies under the holding, and is also Secretary of the Dubai Holding Steering Committee. Before joining Dubai Holding, he served as a financial analyst for the Executive Office of Dubai. Mr. Al Ansari holds a Bachelors in Engineering degree and a Masters in Business Administration degree, both from Leeds University. He is an Associate Member of the ImechE and a Member of the Urban Land Institute.
- Mr. Hess has been a NYMEX member since 1982 and a Partner in G&H Commodities since 1987. He currently serves on the Executive Committee and the Board of Directors of NYMEX Holdings, Inc., and the New York Mercantile Exchange, Inc. He is also a Director of the Commodity Floor Brokers and Traders Association and has a Masters of Business Administration degree from Pace University.
- Mr. Forman began his career as a Margin Clerk for Shearson Hayden Stone in 1974. He has been a conferring member and Senior Vice President of Prudential Financial Derivatives, LLC, since 2003. In addition to being a member of the Board of Directors of NYMEX Holdings, Inc., Mr. Forman has served on the Futures Industry Operations Committee, the Board of Directors of Futures and Options for Kids, and has been an arbitrator for the National Futures Association since 1992.
- Mr. McNamara is the President of a floor brokerage operation that trades in all of the commodities on the energy trading floor. He has also served as a Vice President with R.J. O’Brien, Inc. since February 2005. Previously, he was Vice President of BancOne Brokerage International, Corp., from 1999 to 2004 and worked as a floor broker for ABN Amro, Inc., from 1992 to 1998. Mr. McNamara has also worked for various futures commission merchants. He chairs the Options Advisory Committee and has been a NYMEX Division member since 1986 and a COMEX Division member since 1985.
