The heads of Abu Dhabi National Oil Company (Adnoc) and ExxonMobil focused on downstream investment at an annual industry gathering in Houston, giving an indication of the industry’s strategic priorities as the longer-term investment environment for oil and gas remains uncertain.
Sultan Al Jaber, who took over as head of Adnoc early last year, said in a discussion with oil historian Daniel Yergin at the CERAWeek summit that one of the three big trends he saw driving the industry was an “exponential expansion of the petrochemical market”, particularly in Asia. He said this was a key reason Adnoc has set a goal of tripling petrochemical production by 2025.
Exxon’s new chief executive, Darren Woods, who took over after his predecessor, Rex Tillerson, became the secretary of state in US president Donald Trump’s administration last month, outlined in a keynote speech the company’s plans to invest US$20 billion on 11 downstream projects in the US Gulf Coast region over the next decade, creating up to 45,000 jobs.
The comments underline the industry’s current dilemma: dealing with a persistent glut of supply while also ensuring there is sufficient investment to diversify and avoid exposure to another boom-bust cycle.
Also, for national oil companies such as Adnoc, there is a renewed urgency to diversify to meet long-standing national goals, such as fostering non-oil industry growth, something for which the petrochemical sector can be a catalyst.
Mr Al Jaber noted the departure Adnoc has taken in its investment strategy by being more flexible in the types of deals it will enter. He gave the example of the share swap in December that gave Abu Dhabi a 2 per cent stake in BP in exchange for BP’s 10 per cent stake in Adnoc’s main onshore oil concession, Adco.
Also, the deal last month with China National Petroleum and CEFC China Energy, giving the Chinese entities a combined 12 per cent of Adco and helping Abu Dhabi align with one of the world’s fastest-growing oil markets.
In the next few decades, “most [oil demand] growth will come from non-OECD countries and will require an estimated $25 trillion in new investment”, Mr Al Jaber said. “That is a level of funding no company can deliver on its own. It’s only possible through new and productive partnerships, within the industry, as well as between the public and private sector.”
Adnoc has also recently announced Abu Dhabi’s first strategic oil deal with India, a joint storage project, and said it is studying others, including downstream deals, to open up further access to the country’s vast oil market.
In petrochemicals, Adnoc has built market positions mainly through links with companies such as Borealis, which is majority owned by Mubadala Investment Company, an Abu Dhabi strategic development fund. Borouge, a Borealis and Adnoc petrochemicals joint venture in the Western region of Abu Dhabi, doubled production last year with the aim of gaining more Asian market share.
Exxon also is partnering as it expands and last summer said it is looking at developing a joint venture petrochemical complex in either Texas or Louisiana with Saudi Basic Industries (Sabic), whose vice chairman, Yousef Abdullah Al Benyan, said Sabic is keen to diversify geographically while having access to cheap shale oil and gas feedstock.
Mr Al Jaber said that Adnoc is looking for “value add, strategic partners” for its projects, ones that can bring a technological advantage – which will, for example, open up new chemicals markets – or, like the Chinese and Indian deals, can ensure access to markets.
The industry’s emphasis on spreading risks, cost control and strategic diversification is reminiscent of the low oil price period at the turn of the century, which also resulted in some of the mega-mergers that created companies like ExxonMobil and BP (which bought Arco and Amoco).
amcauley@thenational.ae
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Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
Short-term let permits explained
Homeowners and tenants are allowed to list their properties for rental by registering through the Dubai Tourism website to obtain a permit.
Tenants also require a letter of no objection from their landlord before being allowed to list the property.
There is a cost of Dh1,590 before starting the process, with an additional licence fee of Dh300 per bedroom being rented in your home for the duration of the rental, which ranges from three months to a year.
Anyone hoping to list a property for rental must also provide a copy of their title deeds and Ejari, as well as their Emirates ID.
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
