Kuwait Energy will continue to expand this year, according to the chief executive Sara Akbar.
"We have big development plans for our existing assets," said Ms Akbar.
"This is our year for exploring and more development. A number of projects we have had in the pipeline will go into execution phase."
She added, however, that the company was yet to make a decision about whether a public share sale would go ahead.
The company currently operates in eight countries and forecasts its staff numbers will swell to 880 from 550 over the course of this year.
The company expects to start exploration of Block 9 in Iraq's southern Basra province. It has already developed two assets in Iraq, but this is its first exploring from scratch.
The Iraqi government is expected to approve the contract on January 27.
Drilling is also about to start in Egypt's Mesaha Block. Kuwait Energy has held this asset for some time, but explorations have only recently yielded success there.
"We are drilling an exploratory well now and we hope that will give us more information about the basin," said Ms Akbar. The company has five assets in Egypt, three of which are already producing. In Yemen, exploration will start in Block 49 and drilling in Block 43.
Last year, the company won the bid to enter into talks with the Afghan government to explore and develop two blocks in the Afghan-Tajik Basin in the north of the country.
"It's a very well-known basin that has yielded good results in Tajikistan and Turkmenistan," said Ms Akbar.
"Recently the government did a seismic survey and we see good potential there."
With its experience in Iraq, Ukraine and Russia, Kuwait Energy is better placed than many of its competitors to mange the risks that come with operating in such a volatile country.
She downplayed the potential for unrest after international troops withdraw from the country by the end of 2014, saying it is not a huge cause for concern.
"What is happening there is much like Iraq," she said. "American troops left and what happened is the same story."
She added that, so far, officials at the Afghan mines ministry have demonstrated a commitment to acting in a transparent manner and adopting the best practices of the industry.
"This has happened up to this point in time," she said. "We also have very good partners: Dragon Oil, TPAO [the national oil and gas company of Turkey], and a local company, Ghazanfar. The consortium is very good."
Ms Akbar reiterated that Kuwait Energy plans an initial public offering in London but said she does not know when that will be. In 2011 the company scrapped an IPO plan.
"We cannot fix any timing," she said.
"It depends on the market situation. Last year was a horrible market for IPOs so we will see how things are this year."
[ lgutcher@thenational.ae ]
Dolittle
Director: Stephen Gaghan
Stars: Robert Downey Jr, Michael Sheen
One-and-a-half out of five stars
A Prayer Before Dawn
Director: Jean-Stephane Sauvaire
Starring: Joe Cole, Somluck Kamsing, Panya Yimmumphai
Three stars
SPECS
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COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
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.”
Naga
Director: Meshal Al Jaser
Starring: Adwa Bader, Yazeed Almajyul, Khalid Bin Shaddad
Rating: 4/5
The currency conundrum
Russ Mould, investment director at online trading platform AJ Bell, says almost every major currency has challenges right now. “The US has a huge budget deficit, the euro faces political friction and poor growth, sterling is bogged down by Brexit, China’s renminbi is hit by debt fears while slowing Chinese growth is hurting commodity exporters like Australia and Canada.”
Most countries now actively want a weak currency to make their exports more competitive. “China seems happy to let the renminbi drift lower, the Swiss are still running quantitative easing at full tilt and central bankers everywhere are actively talking down their currencies or offering only limited support," says Mr Mould.
This is a race to the bottom, and everybody wants to be a winner.