Five talking points from the week in UAE business

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Antonie Robertson / The National

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Adnoc’s highhopes for recovery rate

Like many of its peers, Abu Dhabi National Oil Company is trimming its operating costs because the price of oil has fallen so far. Adnoc said at the weekend that it will make cuts of 10 to 15 per cent. At the same time as it is trying to stretch its dirhams, Adnoc is trying to stretch its deposits. The company said it will spend more on R&D in order to extract more oil from fields that are already producing. Although the global average for recovery from an oil reservoir stands at about 35 per cent, Adnoc is looking to increase oil recovery rates to 70 per cent at its fields. "Many thought it was unrealistic to increase recovery to 70 per cent, but we believe it's unrealistic to leave it at 30 per cent," said Yasser Saeed Al Mazrouei, Adnoc's deputy director of exploration and production. Rob McKenzie

Theme parks going up, brick by brick

We all like to see a progress report on a major development in the UAE, and this week we were given the inside track on the huge Dubai Parks and Resorts project in the Jebel Ali area. While other GCC nations are having to think twice about new developments in light of the lower oil price, Dubai continues to plough on as it bids to strengthen its tourism industry ahead of Expo 2020. The 25-million sq ft park, which is planned to open next year, is an example of the full-steam-ahead approach. About 7,800 workers are on site, with Motiongate, Legoland and Bollywood parks and a four-star Lapita hotel managed by Marriott all set to feature at the opening in 2016. "We are confident of meeting the deadline as vast areas such as parking and landscaping will not be done until towards the end," said Vinit Shah, Dubai Parks and Resorts' chief destination management officer. He likened the project to Orlando, Florida, and if that's the case then Dubai's global reach is likely to grow that bit further. Ian Oxborrow

Sony plays it safe

Should Apple and Samsung be concerned about competition in the smartphone market for the remainder of the year? I think Tim Cook can sleep easily. Sony, the maker of fine high-end phones that few people buy, unveiled its new flagship this week. We were expecting the Xperia Z4, but instead were shown in Dubai on Monday evening the half-baked Xperia Z3+. Yes, Apple has used the incremental tactic with its iPhone, but if anyone is to challenge the two most popular ranges then some serious innovation is going to be needed. The Xperia Z3+ looks like another tasty device with impressive specs and a couple of handy, though far from groundbreaking, features. However, it appears Sony simply hasn't made the advances it had hoped and therefore couldn't justify the "Z4" tag. The lumbering giant of technology has taken another heavy step backwards in the race for mobile dominance. Next contender? The LG G4. Ian Oxborrow

Oil countries on a slippery slope

Next week, Opec countries meet in Vienna to set their direction. This comes, of course, at a parlous time: oil prices have fallen, and everybody would really like it if somebody - anybody - would cut production in order to prop up prices. It is the classic question of who wants to bell the cat. The on-the-ground issues are who would take the hit and what price target Opec might set. Or the group's members could just sit tight and hope non-Opec producers (read: US shale companies) fall out of the race. The big picture, even according to Opec itself, is stark. On Thursday, an Opec long-term strategy report predicted that crude supply from non-Opec producers would keep growing until at least 2017. The other side of the equation is demand, and the Opec report predicted that global demand will fall from 30 million barrels per day last year, to 28.2m in 2017. Rob McKenzie

Golden era for precious metal?

In times of trouble, investors always reach for gold. You only have to look back at the global financial crisis of 2008-09 to know that. In 2007, the price nearly tripled to just over US$500 an ounce, before hitting a peak of $1,900 in 2011 when the European single currency crisis intensified. But when the panic subsided, investors turned their attention to the US dollar instead. Gold currently sits around the $1,188 mark. In the Money section this week, we asked whether it is time for investors to finally give up on the precious metal. Yes, gold has had a torrid time, and the strengthening dollar and soaring equity markets have worked against it, but some financial advisers still consider it useful as a hedge against inflation, recommending investors to have a small position in gold. Others warn that gold doesn't pay any income, making it harder to value against assets such as equities or property. While the price of gold could go either way, the metal is still defined as a real asset and historically these have outperformed financial assets during times of economic turmoil. The decision is yours. Alice Haine

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