Adnoc L&S acquires six crude carriers to expand global reach

Adnoc Logistics and Services is acquiring six Very Large Crude Carriers (VLCCs) as the shipping and maritime logistics arm of Abu Dhabi National Oil Company continues to expand operations and add more vessels to its fleet.

Two VLCCs have already been added to Adnoc L&S fleet and another will join shortly. The company has also placed an order for three new-build vessels, which will be delivered in 2022 and 2023, the company said in a statement on Thursday. These vessels are the first VLCCs to join the Adnoc L&S fleet, adding a total cargo capacity of 12 million barrels.

“The acquisition of these six VLCCs is one of our most significant growth steps to-date,” Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S, said.

“This strategic move allows us to offer new services to our customers and supports Adnoc and its trading entities to access new global energy markets, while also delivering incremental value and a new revenue stream to our business.”

Adnoc L&S was able to purchase both existing and new-build vessels at competitive prices given current market conditions, he said, without giving financial details of the deals.

“Owning these vessels will deliver cost efficiencies for our business, as opposed to chartering vessels, while also enabling us to provide a more reliable service to customers,” he said.

Adnoc L&S, which owns and operates the largest shipping fleet in the UAE, is pursuing a major fleet expansion programme to expand its reach and better serve its global customers. The company aims to support its parent Adnoc as it increases production and refining capacity as well as growing its new trading operations.

Adnoc plans to grow oil production capacity from its current 4 million barrels per day of crude to 5 million bpd by 2030.

It also plans to double its refining capacity and treble its petrochemicals capacity, with a joint venture with state holding company ADQ targeting $5bn of projects at a derivatives park in Ruwais.

The company also set up two trading ventures last year. Adnoc Trading is focused on crude oil and started derivatives trading in September. Adnoc Global Trading, a joint venture with Italy’s ENI and Austrian OMV, focuses on the trading of refined products and began operations in December.

Adnoc L&S said the new-build vessels will also create in-country value as the project management and design work for them is being undertaken in the UAE.

Adnoc L&S grew its fleet with 16 deep-sea vessels in 2020. In addition to its new VLCC fleet, the company confirmed the order of five new-build and one second-hand Dual Fuel Very Large Gas Carriers (VLGCs) for AW Shipping, its joint venture with Wanhua Chemical Group. The company recently also announced the purchase of four bulk carriers.

Adnoc is looking for "smart growth" opportunities and joint ventures as it plans to add 10 liquefied petroleum gas and long-range product tankers to its portfolio, Capt Al Massabi told The National in August.

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.”

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.

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QUALIFYING RESULTS

1. Max Verstappen, Netherlands, Red Bull Racing Honda, 1 minute, 35.246 seconds.
2. Valtteri Bottas, Finland, Mercedes, 1:35.271.
3. Lewis Hamilton, Great Britain, Mercedes, 1:35.332.
4. Lando Norris, Great Britain, McLaren Renault, 1:35.497.
5. Alexander Albon, Thailand, Red Bull Racing Honda, 1:35.571.
6. Carlos Sainz Jr, Spain, McLaren Renault, 1:35.815.
7. Daniil Kvyat, Russia, Scuderia Toro Rosso Honda, 1:35.963.
8. Lance Stroll, Canada, Racing Point BWT Mercedes, 1:36.046.
9. Charles Leclerc, Monaco, Ferrari, 1:36.065.
10. Pierre Gasly, France, Scuderia Toro Rosso Honda, 1:36.242.

Eliminated after second session

11. Esteban Ocon, France, Renault, 1:36.359.
12. Daniel Ricciardo, Australia, Renault, 1:36.406.
13. Sebastian Vettel, Germany, Ferrari, 1:36.631.
14. Antonio Giovinazzi, Italy, Alfa Romeo Racing Ferrari, 1:38.248.

Eliminated after first session

15. Antonio Giovinazzi, Italy, Alfa Romeo Racing Ferrari, 1:37.075.
16. Kimi Raikkonen, Finland, Alfa Romeo Racing Ferrari, 1:37.555.
17. Kevin Magnussen, Denmark, Haas Ferrari, 1:37.863.
18. George Russell, Great Britain, Williams Mercedes, 1:38.045.
19. Pietro Fittipaldi, Brazil, Haas Ferrari, 1:38.173.
20. Nicholas Latifi, Canada, Williams Mercedes, 1:38.443.