Iraq has published data showing a rare level of detail for its oil production and exports.
The country’s state oil marketing agency released a statement on Sunday showing September production figures for each of the 26 fields it controls, plus a single output figure for the semi-autonomous Kurdish region, which manages its crude independently. Previous monthly statements showed just two figures: total production and total exports. The Oil Marketing Company, known as Somo, also provided detailed data on exports and domestic consumption.
Opec’s second-largest producer says it pumped more than 4.7 million barrels a day last month, several hundred thousand barrels a day more than oil-industry watchers recognise. Opec assesses output for its 14 members based on such secondary sources. Iraq wants the group to accept the ministry’s figures before a November 30 meeting at which Opec could limit production for its members.
The Iraq oil minister Jabbar Al Luaibi complained about Opec data at a meeting in September in Algiers. He adopted a milder approach last week, inviting reporters to Baghdad for a tour of the national museum and a detailed discussion of production figures. “We want you to see for yourselves what our production is,” he said last week.
The field-specific data for September sheds light on how Somo calculates Iraqi production. However, it does not provide a breakdown of Kurdish production, which accounts for much of the difference between the data cited by Somo and secondary sources.
"It's an effort of transparency and backing up their numbers, but I'm not quite sure how effective it's going to be," Robin Mills, the chief executive of the consultant Qamar Energy and a columnist for The National, said in Dubai. "The biggest discrepancy is likely to be in the Kurdish fields."
Production from the Kurdish enclave in northern Iraq averaged 546,000 barrels a day last month, according to Somo. That figure is an estimate because the central government has not received the latest production data from Kurdish authorities, the Somo director general Falah Al Amri said last week. Somo bases its estimate on what Kurdish production was in 2013 and 2014, he said.
In the north of the country, the Kirkuk and Baba Gurgur fields produced 93,000 barrels a day for the federal North Oil Company (NOC), Somo said. The nearby Bai Hasan and Avana fields pumped 275,000 barrels a day for the NOC.
The BP-operated Rumaila oilfield, Iraq’s largest, pumped an average of 1.4 million barrels a day in September, Somo said. The two fields at West Qurna produced a combined 870,000 barrels a day, while output from Zubair was 390,000; Majnoon, 214,000; and Halfaya, 204,000.
* Bloomberg
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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.”
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