King Salman became on Wednesday the first Saudi monarch to visit Russia.
Relations between the two energy superpowers, Cold War opponents and more recently commercial and political rivals, have often been tepid. Now, with unprecedented Opec cooperation and Russian involvement in the Middle East, both see benefits in deeper engagement.
Ahead of the visit, the two countries decided to set up a US$1 billion joint energy fund, and Aramco signed five memorandums of understanding with Russian firms to cooperate in petrochemicals, drilling, oilfield services and, the two most significant, oil trading and gas. The deal with Litasco, the trading arm of Lukoil, could give Aramco access to Russian-owned refineries in the Mediterranean.
And the accord with Gazprom covers liquefied natural gas trade. Aramco has looked at importing LNG to replace domestic oil for power generation, but there is no particular reason to buy from Russia. And Saudi Arabia does not have an LNG industry of its own.
Russia’s existing LNG facility in the far eastern island of Sakhalin mainly serves the East Asian market while its plant under construction on the Yamal Peninsula will use the “Northern Sea Route” through the melting Arctic to Asia. The Russian energy minister Alexander Novak has raised the possibility that Aramco could invest in a second plant at Yamal, although Aramco has denied this. Gazprom, Rosneft and the trader Gunvor have sold third-party LNG to Egypt and elsewhere from their trading portfolios, but Saudi Arabia could equally tender for imports from any supplier.
In 2015, Saudi Arabia’s Public Investment Fund had already agreed to invest $10bn over five years in the Russia Direct Investment Fund. But even this relatively modest annual amount does not yet appear to have been met. Russia, as an exporter of gas and nuclear technology, has more to gain from selling to the Saudis than vice versa.
So these energy deals mostly look like the usual stuff of such bilateral summits, and their significance will depend on the commercial realities. Both countries are hydrocarbon exporters, both are short of capital given the slump in oil prices, both are trying with some difficulty to diversify their economies. For each China makes a more natural trading partner.
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More interesting is what this visit says about Russia’s success in inserting itself into Middle East affairs. The Soviet Union’s influence was largely expelled from the region during the 1970s, with the Saudis playing a leading role in backing pro-American forces. But in recent years Russia has appeared as a military force in Syria in alliance with Iran and Bashar Al Assad, and a diplomatic player in the Iranian nuclear negotiations, in Libya’s civil war and in Egypt. The Saudis may hope to influence Russia over Iran, but not detach it from Tehran.
In energy, the state firm Rosneft’s loans have been crucial in reviving the Kurdish oil industry and setting up the autonomous region for last month’s independence referendum. Russia has gained further influence over the Turkish gas market by agreeing to construct a pipeline from Kurdistan. Lukoil and Gazprom Neft are developing large projects in southern Iraq, while they, Lukoil and the overseas state investor Zarubezhneft have preliminary deals for oilfields in Iran. Rosneft has bought into Egypt’s giant new Zohr gasfield, and taken 49 percent of the Indian refiner Essar, against reported competition from Aramco. And Rosatom has a variety of deals at different stages to build nuclear power plants in Saudi Arabia itself, Iran, Turkey, Egypt and Jordan.
In the space of a few years, Russia’s direct role in Middle East energy has gone from negligible to significant, although China has advanced even further, while western dominance has evaporated. Saudi Arabia’s upstream sector is not open to foreign equity participation and so it cannot offer any carrots here. So far Russian oil companies have not entered projects in Abu Dhabi or Qatar, but they may be interested in the Qataris’ planned LNG expansion.
Russia has been crucial in pressuring Iran to join the Opec production limits agreement, and to roping together a motley crew of non-Opec countries, including some former Soviet states, to complement it. Russia has gained in oil prices and influence without having to cut production very much. And while broadly supportive of extending the deal beyond March, it has yet to commit.
“Is there really anything in the world that’s absolutely permanent?” answered the Russian president Vladimir Putin, when asked whether Saudi Arabia would always align geopolitically with the US. These Russo-Saudi discussions do not represent some dramatic reshaping of the region’s alliances. But American Middle East policy has veered from undesirable to the GCC under the US president Obama, to incoherent under the current administration. Under any president, the natural trend of an overstretched, more isolationist and more energy self-sufficient US will be to focus limited diplomatic resources more on Asia.
There is still no other power that can replicate American military and political might in the Middle East. Just as they are trying to diversify their economies, so the regional countries are attempting to diversify their allies, gaining support on specific issues from Russia and, in future, from China and perhaps India or other outside players. Russia can be useful to Saudi Arabia, but Moscow has more levers to pull than Riyadh.
Robin M Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
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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Amith's selections:
5pm: AF Sail
5.30pm: Dahawi
6pm: Taajer
6.30pm: Pharitz Oubai
7pm: Winked
7.30pm: Shahm
8pm: Raniah
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
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The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Scorecard:
England 458 & 119/1 (51.0 ov)
South Africa 361
England lead by 216 runs with 9 wickets remaining
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Match info
Uefa Nations League A Group 4
England 2 (Lingard 78', Kane 85')
Croatia 1 (Kramaric 57')
Man of the match: Harry Kane (England)
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
THE BIO
Ms Davison came to Dubai from Kerala after her marriage in 1996 when she was 21-years-old
Since 2001, Ms Davison has worked at many affordable schools such as Our Own English High School in Sharjah, and The Apple International School and Amled School in Dubai
Favourite Book: The Alchemist
Favourite quote: Failing to prepare is preparing to fail
Favourite place to Travel to: Vienna
Favourite cuisine: Italian food
Favourite Movie : Scent of a Woman
Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
- Stay invested: Time in the market, not timing the market, is critical to long-term gains.
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- Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
england euro squad
Goalkeepers: Dean Henderson (Man Utd), Sam Johnstone (West Brom), Jordan Pickford (Everton)
Defenders: John Stones (Man City), Luke Shaw (Man Utd), Harry Maguire (Man Utd), Trent Alexander-Arnold (Liverpool), Kyle Walker (Man City), Tyrone Mings (Aston Villa), Reece James (Chelsea), Conor Coady (Wolves), Ben Chilwell (Chelsea), Kieran Trippier (Atletico Madrid)
Midfielders: Mason Mount (Chelsea), Declan Rice (West Ham), Jordan Henderson (Liverpool), Jude Bellingham (Borussia Dortmund), Kalvin Phillips (Leeds)
Forwards: Harry Kane (Tottenham), Marcus Rashford (Man Utd), Raheem Sterling (Man City), Dominic Calvert-Lewin (Everton), Phil Foden (Man City), Jack Grealish (Aston Villa), Jadon Sancho (Borussia Dortmund), Bukayo Saka (Arsenal)
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
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Leap of Faith
Michael J Mazarr
Public Affairs
Dh67
The specs: McLaren 600LT
Price, base: Dh914,000
Engine: 3.8-litre twin-turbo V8
Transmission: Seven-speed automatic
Power: 600hp @ 7,500rpm
Torque: 620Nm @ 5,500rpm
Fuel economy 12.2.L / 100km
The biog
Name: Mariam Ketait
Emirate: Dubai
Hobbies: I enjoy travelling, experiencing new things, painting, reading, flying, and the French language
Favourite quote: "Be the change you wish to see" - unknown
Favourite activity: Connecting with different cultures
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
COMPANY%20PROFILE
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Company%C2%A0profile
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The%20specs
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