Abu Dhabi National Oil Company awarded two contracts to South Korea’s Samsung Engineering worth $3.5 billion to help process other crude grades as the company looks to free up its flagship Murban grade for export markets.
The first contract worth $3.1bn will enable Samsung to process 420,000 barrels per day of crude sourced from the offshore Upper Zakum concession, and grades of a similar nature from the market, Adnoc said in a statement. The second $473m contract will recover power and water and is set to generate 230MW electricity and 62,400 cubic metres of water per day by capturing waste heat using closed-cycle power generation technology.
"As Adnoc continues to deliver on its 2030 smart growth strategy, a number of new and exciting opportunities exist across our value chain, particularly in the downstream, which offer the potential to deepen and develop the longstanding relationship between Adnoc and its Korean counterparts,” said Dr Sultan Al Jaber, group chief executive of the Adnoc Group.
The UAE, the fourth-largest oil producer in the Middle East, is set to announce a downstream strategy soon, as it looks to profit more from the sale of products. Abu Dhabi, which produces much of the country’s oil and gas and accounts for 6 per cent of global crude reserves, aims to double refining and triple petrochemical capacities by 2025.
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Read more:
Adnoc expected to announce downstream strategy "soon", CEO says
UAE cuts Murban allocations for March by 25%, says Energy Minister
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Murban, the UAE’s flagship crude, has light, sweet properties comparable to tight oil from Eagle Ford in the US and is typically sold at a premium of $3.5 per barrel over the Dubai crude grade, said Iman Nasseri, acting managing director - Middle East at London-based Facts Global Energy. The UAE lowered allocations of Murban by 25 per cent in January in order to comply with the Opec-led restrictions on output to help boost prices and lower inventory levels, following the oil price slump of 2014.
Thailand and Japan are the biggest buyers of Murban crude, with smaller buys from other Asian consumers such as Sri Lanka and Taiwan, said Mr Nasseri.
Murban accounts for 10 per cent of Japan's current import of crude with Asia's second-largest economy importing around 200,000 bpd of Murban last year, with similar volumes bought by Thailand, data from FGE shows.
Mr Nasseri said that the award to the South Korean contractors comes amid plans at the refinery to have capabilities to process heavier, more sulphurous blends such as Upper Zakum.
The engineering, procurement and construction (EPC) work on the Ruwais refinery West complex is set for completion by 2022, the company said in a statement.
The waste heat project, designed to lower the company’s environmental impact is targeting a 2023 completion timeline.
The Abu Dhabi oil major, which in October integrated its refining, transmission and distribution entities under a single brand umbrella as it looks to grow a leaner business model, is also looking to develop a mixed-liquid feedstock naphtha cracker, as well as investments to boost refining capacities.
The UAE’s five-year $109bn spending plan approved last year, includes upstream exploration for unconventional gas reserves, and plans to develop downstream capabilities at home and abroad.
Abu Dhabi’s state oil company is currently engaged in a flurry of upstream activity offshore the emirate, awarding concession stakes to European oil majors such as France’s Total and Italy's Eni as well as exploration and production firms from its traditional market base in Asia.
As Adnoc continues to split the erstwhile Adma-Opco entity while retaining a 60 per cent stake, its engagements with its new partners will look to evolve into possible downstream collaboration.
Total chief executive Patrick Pouyanne, whose company won $1.45bn worth of stakes in the twin oil and gas concessions of Umm Shaif and Nasr as well as Lower Zakum, told The National earlier this month that he was in talks with Adnoc to help the company "expand in the downstream."
Abu Dhabi state fund Mubadala-owned Cepsa, which won a 20 per cent stake offshore last month, is also in the planning phase for a petrochemicals venture to build a linear alkyl benzene complex at Ruwais to be integrated with Adnoc’s refinery facility.
Also known as detergent alkylate, LAB is the most common chemical compound used in the manufacturing of biodegradable household and industrial agents.
Diriyah%20project%20at%20a%20glance
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How it works
1) The liquid nanoclay is a mixture of water and clay that aims to convert desert land to fertile ground
2) Instead of water draining straight through the sand, it apparently helps the soil retain water
3) One application is said to last five years
4) The cost of treatment per hectare (2.4 acres) of desert varies from $7,000 to $10,000 per hectare
UAE SQUAD FOR ASIAN JIU-JITSU CHAMPIONSHIP
Men’s squad: Faisal Al Ketbi, Omar Al Fadhli, Zayed Al Kathiri, Thiab Al Nuaimi, Khaled Al Shehhi, Mohamed Ali Al Suwaidi, Farraj Khaled Al Awlaqi, Muhammad Al Ameri, Mahdi Al Awlaqi, Saeed Al Qubaisi, Abdullah Al Qubaisi and Hazaa Farhan
Women's squad: Hamda Al Shekheili, Shouq Al Dhanhani, Balqis Abdullah, Sharifa Al Namani, Asma Al Hosani, Maitha Sultan, Bashayer Al Matrooshi, Maha Al Hanaei, Shamma Al Kalbani, Haya Al Jahuri, Mahra Mahfouz, Marwa Al Hosani, Tasneem Al Jahoori and Maryam Al Amri
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
FORSPOKEN
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Street%20Fighter%206
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Diablo%20IV
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Baldur's%20Gate%203
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The%20Legend%20of%20Zelda%3A%20Tears%20of%20The%20Kingdom
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Marvel's%20Spider-Man%202
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Starfield
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Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
RESULTS
5pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (Turf) 2,200m
Winner: M'A Yaromoon, Jesus Rosales (jockey), Khalifa Al Neydai (trainer)
5.30pm: Khor Al Baghal – Conditions (PA) Dh80,000 (T) 1,600m
Winner: No Riesgo Al Maury, Antonio Fresu, Ibrahim Al Hadhrami
6pm: Khor Faridah – Handicap (PA) Dh80,000 (T) 1,600m
Winner: JAP Almahfuz, Royston Ffrench, Irfan Ellahi
6.30pm: Abu Dhabi Fillies Classic – Prestige (PA) Dh110,000 (T) 1,400m
Winner: Mahmouda, Pat Cosgrave, Abdallah Al Hammadi
7pm: Abu Dhabi Colts Classic – Prestige (PA) Dh110,000 (T) 1,400m
Winner: AS Jezan, George Buckell, Ahmed Al Mehairbi
7.30pm: Khor Laffam – Handicap (TB) Dh80,000 (T) 2,200m
Winner: Dolman, Antonio Fresu, Bhupath Seemar
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.”
