Business

Zadco extends Amec Foster Wheeler’s management of offshore oil and gas project

The UZ750 project is in the Upper Zakum oilfield, 84 kilometres north-west of Abu Dhabi. It is the second-biggest oilfield in the Arabian Gulf and comprises four artificial islands with associated drilling and production facilities.

Michael Fahy
Michael Fahy

August 18, 2015

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Amec Foster Wheeler has been awarded an extension to its project management consultancy contract to oversee the UZ750 oil and gas project off the coast of Abu Dhabi.

The company did not disclose a value for its contract award but said it would be delivered as part of an integrated project management deal with its client Zakum Development Company (Zadco), which is overseeing the contractor’s delivery of the project.

Zadco is a venture between Abu Dhabi National Oil Company, ExxonMobil and Japan Oil Development.

The UZ750 project is in the Upper Zakum oilfield, 84 kilometres north-west of Abu Dhabi. It is the second-biggest oilfield in the Arabian Gulf and comprises four artificial islands with associated drilling and production facilities.

Amec Foster Wheeler started work on the project in June 2008. The main contract work was split into two packages. One, worth US$800 million, was awarded to a consortium of contractors comprising Technip and the National Petroleum Construction Company in 2012. The second package, worth $3.7 billion, was awarded to Petrofac and Daewoo Shipbuilding and Marine Engineering in 2013.

Amec Foster Wheeler said the project was due for completion in December 2017. Once open, it will be capable of generating a million barrels of oil per day until at least 2050.

The contract extension “cements Amec Foster Wheeler’s continuing engagement in this strategically-important project”, said Roberto Penno, the firm’s group president for the Middle East, Africa and southern Europe.

“The Middle East is a key growth area for Amec Foster Wheeler and we look forward to continuing our relationship with Zadco on this next important phase of work.”

The credit ratings agency Standard & Poor’s this month said that it was expecting the UAE to run a budget deficit of 1.5 per cent per year between this year and 2018 because of lower oil prices.

Its forecast was based on an assumption that Brent crude prices would average $55 a barrel this year and rise to $65 a barrel next year.

Amec Foster Wheeler was formed after British firm Amec’s $3.2bn takeover of Switzerland-based Foster Wheeler last year.

mfahy@thenational.ae

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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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Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.

The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.

1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):

a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33

b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.

2. For those who have worked more than five years

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