Abu Dhabi National Energy Company, or Taqa as it is known, is retaining the vast majority of its oil and natural gas assets following an almost year-long strategic review.
The strong contribution of the oil and gas business to Taqa's earnings amid a surge in global hydrocarbon prices is among the reasons it has decided to keep the assets, Taqa said in a statement on Tuesday.
The decision takes into account "macroeconomic changes" during the past 12 months, which are expected to continue for some time, as well as “other asset-specific drivers”, the company said.
From its oil and gas portfolio, the company only plans to divest its upstream assets in the Netherlands, where it is already in discussions for the sale. The decision is based on “the nature of the assets and the relatively small contribution the assets make to Taqa's group earnings”, the company said.
“We have conducted an extensive review of our oil and gas portfolio, including reaching out to the market to explore the potential for disposal,” Jasim Thabet, group chief executive and managing director of Taqa, said.
“Retaining the vast majority of the portfolio will deliver the best value for the company and its stakeholders. This is in part evidenced by the strong contribution — over 15 per cent — that the oil and gas business contributed to our revenue and earnings in 2021. That trend has continued into this year.”
In September, Taqa announced the strategic review to assess all options for its oil and gas division and “the optimal course for its future development while taking into consideration the evolution of the global energy industry as it transitions towards a cleaner and more sustainable future".
Oil prices gained 67 per cent last year as the global economy bounced back from the Covid-19 pandemic-driven slowdown. They have remained volatile this year as Russia’s military assault on Ukraine continues.
Brent, the global benchmark for two-thirds of the world’s oil, rose to a notch under $140 per barrel in March. It has since given up some gains but is still 45 per cent higher since the beginning of this year.
Brent was trading 1.29 per cent lower at $112.04 per barrel at 4.17pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was up 0.30 per cent at $108.76 a barrel.
Last month, Suhail Al Mazrouei, Minister of Energy and Infrastructure, said oil prices could go higher as Chinese demand is set to recover significantly, while efforts by Opec+ group of producers to raise production were not yielding results fast enough.
In June, Opec maintained its forecast that world oil demand would exceed pre-pandemic levels in 2022, but said Russia’s military offensive in Ukraine, developments related to the pandemic and inflationary pressures posed a “considerable risk”.
The group maintained oil demand forecast for this year at 3.36 million bpd, unchanged from the previous month's forecast. Global oil consumption in 2022 is projected to average 100.29 million bpd, with demand exceeding 2019 levels by 0.09 million bpd, according to its estimates.
Taqa, which has upstream and midstream assets in the UK North Sea, the Netherlands, Canada and the Kurdish region of Iraq, is pivoting to become a clean energy champion.
In April, Taqa announced its 2030 strategy that involves investing $10.9 billion in infrastructure development as it seeks to add about 27 gigawatts of power capacity and expand its renewables portfolio.
The company plans to expand its power-generation capacity in the UAE from 18 gigawatts to 30 gigawatts and boost its global generating capacity by 15 gigawatts.
It currently has the Al Dhafra Solar PV Plant under construction, which will overtake Noor Abu Dhabi — also run by Taqa — to become the world’s largest single site solar PV plant, once completed.
“Our strategy remains to be a champion for low carbon power and water for Abu Dhabi and beyond and to continue to improve and expand our utility businesses, with a clear focus on renewables,” Mr Thabet said.
“As such, we remain committed to becoming a net zero company by 2050.”
The UAE, Opec's third-largest oil producer, plans to invest Dh600bn ($163bn) by 2050 in renewable and clean energy capacity and achieve net-zero emissions in the next three decades. The UAE will also host the 28th UN global climate talks next year.
Taqa, Abu Dhabi National Oil Company and Mubadala Investment Company last month entered into binding agreements that will see Taqa and Adnoc acquire stakes in green energy company Masdar from Mubadala.
The partnership, announced last year by President Sheikh Mohamed, aims to create one of the largest renewable energy companies in the world and a pioneer in green hydrogen under the Masdar brand.
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
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Founders: Michele Ferrario, Nino Ulsamer and Freddy Lim
Started: established in 2016 and launched in July 2017
Based: Singapore, with offices in the UAE, Malaysia, Hong Kong, Thailand
Sector: FinTech, wealth management
Initial investment: $500,000 in seed round 1 in 2016; $2.2m in seed round 2 in 2017; $5m in series A round in 2018; $12m in series B round in 2019; $16m in series C round in 2020 and $25m in series D round in 2021
Current staff: more than 160 employees
Stage: series D
Investors: EightRoads Ventures, Square Peg Capital, Sequoia Capital India
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Abu Dhabi GP schedule
Friday: First practice - 1pm; Second practice - 5pm
Saturday: Final practice - 2pm; Qualifying - 5pm
Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
COMPANY%20PROFILE
%3Cp%3EFounder%3A%20Hani%20Abu%20Ghazaleh%3Cbr%3EBased%3A%20Abu%20Dhabi%2C%20with%20an%20office%20in%20Montreal%3Cbr%3EFounded%3A%202018%3Cbr%3ESector%3A%20Virtual%20Reality%3Cbr%3EInvestment%20raised%3A%20%241.2%20million%2C%20and%20nearing%20close%20of%20%245%20million%20new%20funding%20round%3Cbr%3ENumber%20of%20employees%3A%2012%3C%2Fp%3E%0A
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Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
Price: From Dh147,000
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Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
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Sheikh Zayed's poem
When it is unveiled at Abu Dhabi Art, the Standing Tall exhibition will appear as an interplay of poetry and art. The 100 scarves are 100 fragments surrounding five, figurative, female sculptures, and both sculptures and scarves are hand-embroidered by a group of refugee women artisans, who used the Palestinian cross-stitch embroidery art of tatreez. Fragments of Sheikh Zayed’s poem Your Love is Ruling My Heart, written in Arabic as a love poem to his nation, are embroidered onto both the sculptures and the scarves. Here is the English translation.
Your love is ruling over my heart
Your love is ruling over my heart, even a mountain can’t bear all of it
Woe for my heart of such a love, if it befell it and made it its home
You came on me like a gleaming sun, you are the cure for my soul of its sickness
Be lenient on me, oh tender one, and have mercy on who because of you is in ruins
You are like the Ajeed Al-reem [leader of the gazelle herd] for my country, the source of all of its knowledge
You waddle even when you stand still, with feet white like the blooming of the dates of the palm
Oh, who wishes to deprive me of sleep, the night has ended and I still have not seen you
You are the cure for my sickness and my support, you dried my throat up let me go and damp it
Help me, oh children of mine, for in his love my life will pass me by.
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.”
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
If%20you%20go
%3Cp%3EThere%20are%20regular%20flights%20from%20Dubai%20to%20Kathmandu.%20Fares%20with%20Air%20Arabia%20and%20flydubai%20start%20at%20Dh1%2C265.%3Cbr%3EIn%20Kathmandu%2C%20rooms%20at%20the%20Oasis%20Kathmandu%20Hotel%20start%20at%20Dh195%20and%20Dh120%20at%20Hotel%20Ganesh%20Himal.%3Cbr%3EThird%20Rock%20Adventures%20offers%20professionally%20run%20group%20and%20individual%20treks%20and%20tours%20using%20highly%20experienced%20guides%20throughout%20Nepal%2C%20Bhutan%20and%20other%20parts%20of%20the%20Himalayas.%3C%2Fp%3E%0A
