Saudi Aramco’s potential acquisition of a stake in Saudi Basic Industries Corporation, the Middle East biggest petchem company, could delay the planned listing of 5 per cent of the world's biggest oil producer, its chief executive said.
“If the deal is completed, with relevant regulations taken into account, it will definitely affect the timeframe for the partial IPO [initial public offering] of Saudi Aramco,” Amin Nasser said in an interview with Al Arabiya TV, the content of which was circulated by the kingdom’s government communications department on Saturday. “When Saudi Aramco is ready, the decision of going ahead with the IPO is for the state to make.”
Saudi Arabia’s oil minister Khalid Al Falih said in May the planned IPO – which would be the world’s biggest ever listing – will “most likely” happen in 2019, later than the original target of the second half of 2018.
Talks to acquire part of Sabic, which are in the preliminary stage, “must take their time”, Mr Nasser added. “The regulations of the financial markets pertaining to the acquisition processes must be taken into account,” he told Al Arabiya.
Discussions with Sabic’s majority shareholder the Public Investment Fund (PIF) – the country's sovereign wealth fund – to acquire a stake in Sabic are part of Aramco’s strategy to expand its downstream operations, and in particular ramp up involvement in the global petrochemicals market.
The company aims to convert two to three million of oil products per year into chemicals in the long term to transform Aramco from being “a world leader in energy to a world leader in energy and chemicals”, Mr Nasser said. Aramco currently pumps around 10 million bpd of oil.
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The chemicals sector is growing at roughly 3 per cent per year and is set to expand by 50 per cent over the next 20-25 years, he added. Aramco plans to double its petrochemicals production by 2030, to increase the value of each barrel of oil produced and diversify the economy, enabling the kingdom to take a bigger bite of global energy markets beyond transportation, where most oil is consumed.
“To achieve this goal we have two options: either launching new projects, such as Sadara [Aramco’s petchem joint venture with Dow in the kingdom], or through acquisitions,” Mr Nasser said in the interview. “Such a transformation would offer many integration benefits and growth opportunities, as well as added value and economic diversification.”
Saudi Aramco has already taken steps to expand into petrochemicals, such as its acquisition of 50 per cent of German chemicals company Lanxess two years ago, and through its $5bn PetroRabigh II and Sadara projects to help it boost refining capacity to between eight and 10 million barrels per day, from five million bpd at present.
In November, Aramco and Sabic signed an agreement to build a $20bn oil-to-chemicals facility on the Red Sea Coast of Saudi Arabia – the world’s largest such refinery under the plans. Aramco is now eyeing further acquisitions and collaboration opportunities in the chemicals sector.
The possible deal with Sabic, and any further deals with other chemicals firms will "expand the manufacturing chain to include high-value specialised products, as well as achieving the highest possible added value of each oil barrel and [measure of] gas the company produces,” Mr Nasser said.
Credits
Produced by: Colour Yellow Productions and Eros Now
Director: Mudassar Aziz
Cast: Sonakshi Sinha, Jimmy Sheirgill, Jassi Gill, Piyush Mishra, Diana Penty, Aparshakti Khurrana
Star rating: 2.5/5
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
UAE currency: the story behind the money in your pockets
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COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%3A%3C%2Fstrong%3E%20Eco%20Way%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20December%202023%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Ivan%20Kroshnyi%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Electric%20vehicles%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Bootstrapped%20with%20undisclosed%20funding.%20Looking%20to%20raise%20funds%20from%20outside%3Cbr%3E%3C%2Fp%3E%0A
THE SPECS
Engine: 4.4-litre V8
Transmission: Automatic
Power: 530bhp
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Price: Dh535,000
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Engine: Duel electric motors
Power: 659hp
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On sale: Available for pre-order now
Price: On request
The Bloomberg Billionaire Index in full
1 Jeff Bezos $140 billion
2 Bill Gates $98.3 billion
3 Bernard Arnault $83.1 billion
4 Warren Buffett $83 billion
5 Amancio Ortega $67.9 billion
6 Mark Zuckerberg $67.3 billion
7 Larry Page $56.8 billion
8 Larry Ellison $56.1 billion
9 Sergey Brin $55.2 billion
10 Carlos Slim $55.2 billion
Company%20Profile
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Kyrgyzstan v Qatar, 5.45pm
The specs: Lamborghini Aventador SVJ
Price, base: Dh1,731,672
Engine: 6.5-litre V12
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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
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.”
Russia's Muslim Heartlands
Dominic Rubin, Oxford
How Alia's experiment will help humans get to Mars
Alia’s winning experiment examined how genes might change under the stresses caused by being in space, such as cosmic radiation and microgravity.
Her samples were placed in a machine on board the International Space Station. called a miniPCR thermal cycler, which can copy DNA multiple times.
After the samples were examined on return to Earth, scientists were able to successfully detect changes caused by being in space in the way DNA transmits instructions through proteins and other molecules in living organisms.
Although Alia’s samples were taken from nematode worms, the results have much bigger long term applications, especially for human space flight and long term missions, such as to Mars.
It also means that the first DNA experiments using human genomes can now be carried out on the ISS.
