EXCLUSIVE- The Finance Ministry is reviewing seven offers of hedging services from international banks and institutions, government sources told Enterprise yesterday. They refused to disclose the name of the bidders, preferring to wait until a Finance Ministry committee was finished going through the offers, which is expected to happen in two months’ time. They did tell us, however, that the contracts would likely cover a three-year period, adding that one of the banks offered to cover the difference in case global oil prices rise above USD 70/bbl. The sources also implied that the government may select more than one provider, adding that the choice will be determined based on the best average cut-off price and repayment terms offered.

Background: We had suggested on Thursday that the government might be in the market for a hedge after ministers agreed last week that the finance and oil ministries should begin talks with international banks to adopt unspecified “measures” to counter the rise in global oil prices seeing as next year’s budget predicts an average price of USD 67/bbl. Brent broke the USD 80/bbl mark last month before retreating to just under USD 76 last week.