Adnoc’s global expansion through the creation of ventures will present opportunities for its subsidiary, Adnoc Drilling, which is looking for oil drilling tenders in Kuwait and Oman, a senior executive said.
Adnoc, responsible for most of the UAE’s oil production, is boosting its international presence and recently announced the launch of XRG, a lower-carbon energy and chemicals investment unit, with an enterprise value of more than $80 billion.
Last month, oil major BP and XRG announced the completion of a joint venture named Arcius Energy, which will initially focus on gas assets in Egypt.
“All of these ambitious international operations of Adnoc, by definition, [will] open for us a lot of doors,” Youssef Salem, the chief financial officer of Adnoc Drilling told The National.
Adnoc Drilling, which is looking to expand in the Middle East, is seeking contracts for drilling and oilfield services in Kuwait and Oman.
“The idea, over time, is to try to build a position similar to what we have in Abu Dhabi in terms of integration,” Mr Salem said.
The drilling business requires longer pre-qualification processes in each country, whereas service operations allow the company to be “more agile” and quickly respond to attractive tenders, he said.
Last year, Adnoc Drilling was earmarked for inclusion on Kuwait Oil Company’s list of approved contractors.
Kuwait, Opec’s fifth-largest producer, aims to increase its crude oil production to four million bpd by 2035 from about 2.4 million bpd.
National oil companies in the Middle East are set to increase oil and gas output in the coming years, betting on demand in developing economies.
Adnoc Drilling will “achieve or exceed” its profit guidance for 2024 when it reports results in mid-February, Mr Salem said.
In October, the company raised the lower limit for its annual net profit to between $1.2 billion and $1.3 billion, compared with the earlier range of $1.15 billion to $1.3 billion.
Adnoc Drilling's fourth-quarter revenue will reflect the initial earnings generated by its newly formed joint ventures, Turnwell and Enersol, Mr Salem said, adding that these ventures will position Adnoc Drilling for a strong 2025.
Last year, Adnoc Drilling, Schlumberger, and Patterson-UTI formed Turnwell, which will focus on the UAE's unconventional oil and gas programme.
Adnoc Drilling also teamed up with Alpha Dhabi Holding to launch Enersol, a tech-focused joint venture, in January last year. The company aims to invest $1.5 billion in technology-driven firms in the oilfield services sector by the end of 2025.
Enersol spent $750 million to $800 million on acquisitions last year and plans to follow a similar strategy this year, Mr Salem said.
“We have a very healthy pipeline. If you look at last year, [the acquisitions] were a majority in North America, and then kind of minority in Europe and the Middle East, so we're looking again at a very similar pipeline for this year,” he added.
Meanwhile, Turnwell is focused on the Abu Dhabi market due to the scale of projects and the opportunity to build a strong track record of successful operations, Mr Salem said.
Turnwell is currently drilling 144 unconventional oil and gas wells as part of a $1.7 billion contract awarded by Adnoc in May. The programme is “on track” to be completed between the end of 2025 and mid-2026, Mr Salem said.
By completing wells faster, the company can reduce costs, increase profit margins, and redeploy rigs to the next well more quickly, he added.
Adnoc Drilling has a contracted backlog of six rigs for this year and next, which will bring the company’s total to 148 rigs. It also plans to add two to three uncontracted rigs annually as part of its regular operations.
WIDE%20VIEW
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The Written World: How Literature Shaped History
Martin Puchner
Granta
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.”
Key products and UAE prices
iPhone XS
With a 5.8-inch screen, it will be an advance version of the iPhone X. It will be dual sim and comes with better battery life, a faster processor and better camera. A new gold colour will be available.
Price: Dh4,229
iPhone XS Max
It is expected to be a grander version of the iPhone X with a 6.5-inch screen; an inch bigger than the screen of the iPhone 8 Plus.
Price: Dh4,649
iPhone XR
A low-cost version of the iPhone X with a 6.1-inch screen, it is expected to attract mass attention. According to industry experts, it is likely to have aluminium edges instead of stainless steel.
Price: Dh3,179
Apple Watch Series 4
More comprehensive health device with edge-to-edge displays that are more than 30 per cent bigger than displays on current models.
The specs
Engine: 6.2-litre supercharged V8
Power: 712hp at 6,100rpm
Torque: 881Nm at 4,800rpm
Transmission: 8-speed auto
Fuel consumption: 19.6 l/100km
Price: Dh380,000
On sale: now
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
The specs: 2018 BMW R nineT Scrambler
Price, base / as tested Dh57,000
Engine 1,170cc air/oil-cooled flat twin four-stroke engine
Transmission Six-speed gearbox
Power 110hp) @ 7,750rpm
Torque 116Nm @ 6,000rpm
Fuel economy, combined 5.3L / 100km
MATCH INFO
Newcastle United 1 (Carroll 82')
Leicester City 2 (Maddison 55', Tielemans 72')
Man of the match James Maddison (Leicester)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Match info
Uefa Champions League Group H
Manchester United v Young Boys, Tuesday, midnight (UAE)
TV: World Cup Qualifier 2018 matches will be aired on on OSN Sports HD Cricket channel
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%206-cylinder%203-litre%2C%20with%20petrol%20and%20diesel%20variants%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E8-speed%20automatic%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20286hp%20(petrol)%2C%20249hp%20(diesel)%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E450Nm%20(petrol)%2C%20550Nm%20(diesel)%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EStarting%20at%20%2469%2C800%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%3C%2Fp%3E%0A
Our Time Has Come
Alyssa Ayres, Oxford University Press
The Lowdown
Kesari
Rating: 2.5/5 stars
Produced by: Dharma Productions, Azure Entertainment
Directed by: Anubhav Singh
Cast: Akshay Kumar, Parineeti Chopra
The specs: 2018 Renault Koleos
Price, base: From Dh77,900
Engine: 2.5L, in-line four-cylinder
Transmission: Continuously variable transmission
Power: 170hp @ 6,000rpm
Torque: 233Nm @ 4,000rpm
Fuel economy, combined: 8.3L / 100km
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
'Shakuntala Devi'
Starring: Vidya Balan, Sanya Malhotra
Director: Anu Menon
Rating: Three out of five stars
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.
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
More on animal trafficking
UAE currency: the story behind the money in your pockets
Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi
Yadoo’s House Restaurant & Cafe
For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.
Golden Dallah
For the cappuccino, luqaimat and aseeda.
Al Mrzab Restaurant
For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.
Al Derwaza
For the fish hubul, regag bread, biryani and special seafood soup.
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