Global “Big Oil” executives and chiefs of national oil companies will convene in Abu Dhabi to discuss their response to the energy crisis that has been exacerbated by years of underinvestment in the industry's infrastructure worldwide and exacerbated this year by geopolitics.
The Abu Dhabi International Petroleum Exhibition and Conference (Adipec), which will run from October 31 to November 3, comes as global oil and gas spending is expected to shrink this year, despite crude hovering around $95 a barrel.
Despite windfall profits, some global oil companies have been reluctant to plough money into new drilling activity as they face pressure from investors and regulators.
Oil and gas upstream investment needs to increase and be sustained at near pre-Covid levels of $525 billion through 2030 to ensure market balance, according to the International Energy Forum (IEF).
Upstream investment last year was depressed for a second consecutive year at $341bn — nearly 25 per cent below 2019 levels.
“With rising geopolitical tensions and energy market volatility, the trilemma of secure, affordable and sustainable and energy is a key focus for the world’s economies,” Tayba Al Hashemi, chairwoman of Adipec 2022 and chief executive of Adnoc Sour Gas, said in a statement on Friday.
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Adipec 2022: day one — in pictures
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Adipec, which comes a week ahead of the Cop27 conference in Egypt, is expected to draw 2,200 exhibitors and will feature high-profile speakers including energy ministers from the UAE, Saudi Arabia, India and Bahrain. More than 40 ministers and 38 company heads, along with 12,000 delegates from around the world, will deliver more than 350 sessions, the organisers said.
Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, Special Envoy for Climate, managing director and group chief executive of Adnoc; Prince Abdulaziz bin Salman, Saudi Arabia's Minister of Energy; and Shri Hardeep Singh Puri, India's Minister of Petroleum and Natural Gas, are among the confirmed speakers.
Other speakers include Bader Hamed Al Mulla, Kuwait's Deputy Prime Minister and Minister of Oil, Bernard Looney, chief executive of BP, Tengku Muhammad Taufik, president and chief executive of Malaysia's Petronas, Vicki Hollub, president and chief executive of Oxy, and Claudio Descalzi, chief executive of Italy's Eni.
The panel discussions will address challenges faced in the energy markets, clean energy transition plans, and supply and demand trends.
This year, Adipec will feature a Decarbonisation Zone and Conference, which will provide an in-depth focus on cleaner forms of energy and innovative technologies bridging to net-zero, with an emphasis on methane, hydrogen and carbon capture technologies.
The annual event comes as Europe is experiencing its worst energy crisis in history after Russia, the world's second-largest energy exporter before the Ukraine war and the continent's biggest natural gas supplier, reduced its exports in response to the EU’s wide-ranging economic sanctions.
Some countries have boosted their liquefied natural gas (LNG) imports while restarting coal-fired power plants, sparking concerns about their ability to meet long-term climate commitments.
Oil markets will enter a new phase of uncertainty once an EU ban on Russian crude comes into effect on December 5. This will be followed by a ban on oil product imports from February 5.
At the Future Investment Initiative (FII) conference, officials blamed the current energy crisis on the chronic underinvestment in the oil and gas sector and said new sanctions on Russian crude would add to the market uncertainty.
The energy crisis existed before “black swan events that affected every country”, however, among the root causes of the crisis was the inability of financiers, investment institutions and many of the energy companies to invest, Khaldoon Al Mubarak, managing director and chief executive of Mubadala Investment Company, said last week at the FII conference in Riyadh.
The global oil and gas industry requires more than $600bn of investment annually to keep up with the growing demand for energy, even as the world transitions to cleaner forms of energy, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and group chief executive of Adnoc, said last year.
The International Energy Agency (IEA) has said the current crisis could speed up the transition to clean energy.
Even then, investment in renewable energy needs to double to more than $4 trillion by the end of the decade to meet net-zero emissions targets by 2050, the agency said in its World Energy Outlook last week.
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
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UAE currency: the story behind the money in your pockets
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Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
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The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
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.”
On racial profiling at airports
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7.05pm: Handicap Dh165,000 2,200m - Winner: Heraldic, Richard Mullen, Satish Seemar
7.40pm: Conditions Dh240,000 1,600m - Winner: Walking Thunder, Connor Beasley, Ahmed bin Harmash
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10pm: Handicap Dh190,000 1,400m - Winner: Rodaini, Connor Beasley, Ahmed bin Harmash
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."
Company%C2%A0profile
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Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Top New Zealand cop on policing the virtual world
New Zealand police began closer scrutiny of social media and online communities after the attacks on two mosques in March, the country's top officer said.
The killing of 51 people in Christchurch and wounding of more than 40 others shocked the world. Brenton Tarrant, a suspected white supremacist, was accused of the killings. His trial is ongoing and he denies the charges.
Mike Bush, commissioner of New Zealand Police, said officers looked closely at how they monitored social media in the wake of the tragedy to see if lessons could be learned.
“We decided that it was fit for purpose but we need to deepen it in terms of community relationships, extending them not only with the traditional community but the virtual one as well," he told The National.
"We want to get ahead of attacks like we suffered in New Zealand so we have to challenge ourselves to be better."
