Statoil looks offshore in new tack for concession



MONGSTAD, NORWAY // Statoil, the Norwegian oil and gas operator, is shifting from its campaign to secure onshore rights in Abu Dhabi to an offshore bid.

A trove of onshore oilfields accounting for 1.4 million barrels per day (bpd) - half of Abu Dhabi's output - is due to expire in 2014 after a 75-year run, and Statoil was seen as one of the potential beneficiaries in the reshuffling of fields pumped by the "supermajors" since the Second World War.

As recently as 2010 Helge Lund, the chief executive of Statoil, had indicated the company was "positioning" itself for a 2014 bid for the concession often referred to as Adco because it is operated by the Abu Dhabi Company for Onshore Oil Operations.

"We are primarily looking at offshore opportunities," said Mr Lund yesterday. "That has been the key focus of Statoil moving forward."

He was careful to add that Statoil was not officially withdrawing from the Adco bid and was pursuing offshore opportunities: "We continue to respond to the processes in Abu Dhabi and make the company well known and communicate - showing our examples of technology development and how we are running our company."

Statoil, a publicly traded oil company majority-owned by the Norwegian government, has enjoyed success in the past year in expansions outside its home country, boosting its overall production by 12 per cent. This week it engineered a landmark deal with Rosneft to drill in the challenging Russian Arctic.

But the race for Abu Dhabi oil is another story.

A cast of supermajors - ExxonMobil, Total, BP and Royal Dutch Shell, as well as Portugal's Partex - hold the rights to the prized Adco concession and are touting their knowledge of the fields and proprietary technology.

Meanwhile, Abu Dhabi has turned itself eastward, promising South Korea the rights to 1 billion barrels of reserves when Adco expires and arranging a cooperation deal between China National Petroleum Corporation and Abu Dhabi National Oil Company for undeveloped assets in the emirate.

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Company Profile

Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government

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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.”

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)

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Director: Sudha Kongara Prasad

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Tips for taking the metro

- set out well ahead of time

- make sure you have at least Dh15 on you Nol card, as there could be big queues for top-up machines

- enter the right cabin. The train may be too busy to move between carriages once you're on

- don't carry too much luggage and tuck it under a seat to make room for fellow passengers

Company profile

Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
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Investment stage: Pre-series B
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Getting there and where to stay

Etihad Airways operates seasonal flights from Abu Dhabi to Nice Côte d'Azur Airport. Services depart the UAE on Wednesdays and Sundays with outbound flights stopping briefly in Rome, return flights are non-stop. Fares start from Dh3,315, flights operate until September 18, 2022. 

The Radisson Blu Hotel Nice offers a western location right on Promenade des Anglais with rooms overlooking the Bay of Angels. Stays are priced from €101 ($114), including taxes.