Adnoc's logistics arm and Roll Group to provide heavy transport solutions

Abu Dhabi National Oil Company's shipping and maritime arm signed an agreement with Roll Group to implement logistics solutions for both onshore and offshore projects.

Adnoc Logistics and Services and the Dutch company will offer end-to-end heavy lifting and transport solutions as part of the agreement.

The companies will offer installation for engineering procurement and construction contracts.

Roll Group will set up a permanent base at Adnoc Logistics and Services' main industrial hub at Mussafah and will relocate other services to the Riash facility.

"Heavy lift services are an integral part of any large EPC contract, and this combined capability allows us to deliver a comprehensive and cutting-edge solution, which also turns out to be more economical for the project," said Adnoc Logistics and Services chief executive Captain Abdulkareem Al Masabi.

The agreement is part of the UAE's investment drive in the downstream and industrial sectors. The Abu Dhabi company is creating an integrated ecosystem that will meet the transport and logistics needs of large oil and gas projects.

The UAE, Opec's third-largest producer, is raising its production capacity to 5 million barrels per day by 2030.

Separately on Sunday, the UAE's ministry of energy and infrastructure adopted a resolution strengthening the safety of seafarers transiting territorial waters and docking at the country's ports.

The resolution mandates shipowners and operating companies' compliance with the UAE's norms on safety.

“The UAE is a globally-leading maritime hub, with over 25,000 ships calling its ports. This position is supported by the country’s strategic location at the gateway to the Arabian Gulf, the largest oil reserve in the world," UAE energy and infrastructure minister Suhail Al Mazrouei said in a statement.

"The UAE also overlooks the Arabian Sea, which is at the heart of global trade routes. All of this requires us to pay great attention to the safety of our waters and waterways, which are the main artery for the movement of cargo ships coming to our ports, which are the top commercial gateway in the region," he added.

The statement follows a spate of recent attacks in the Arabian Sea, including a drone attack on oil tanker Mercer Street earlier this month that killed two crewmen.

On the same day, the Panama-flagged tanker Asphalt Princess was hijacked by armed men in the Gulf of Oman.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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