The Nautica oil tanker, top, moored alongside the decaying tanker Safer, off the coast of Ras Issa, Yemen. Reuters
The Nautica oil tanker, top, moored alongside the decaying tanker Safer, off the coast of Ras Issa, Yemen. Reuters
The Nautica oil tanker, top, moored alongside the decaying tanker Safer, off the coast of Ras Issa, Yemen. Reuters
The Nautica oil tanker, top, moored alongside the decaying tanker Safer, off the coast of Ras Issa, Yemen. Reuters

UN says operation to offload oil from Safer tanker is finished


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The United Nations said on Friday it has completed the removal of more than one million barrels of oil from a decaying tanker off Yemen's Red Sea coast, avoiding what could have been a “monumental environmental and humanitarian catastrophe”.

UN officials have been warning for years that the tanker – called the Safer – was at risk of exploding and could spill four times as much oil as the 1989 Exxon Valdez disaster off Alaska.

The potential environmental disaster would have cost $20 billion to clean up.

UN Secretary-General Antonio Guterres welcomed the news that “the ship-to-ship transfer of oil from the FSO Safer to the Yemen replacement vessel has been safely concluded today, avoiding what could have been a monumental environmental and humanitarian catastrophe”.

In a statement, Mr Guterres reaffirmed the international organisation's commitment to “successfully” complete the project, which includes delivering a specialised buoy to which the replacement vessel, the Nautica, could be securely moored.

However, he said additional funding will be needed to finish the project and remove any remaining environmental threat to the Red Sea.

US Secretary of State Antony Blinken called on other countries to help raise the remaining funds to see the job through to the end.

“The UN urgently needs the international community and private sector’s financial support to fill the remaining $22 million funding gap needed to finish the job and address all remaining environmental threats.”

David Gressly, the UN Humanitarian Coordinator for Yemen who has led UN efforts involving the Safer since September 2021, said the work needs to be finished.

“The installation of a CALM buoy to which the replacement vessel will be safely tethered is the next crucial step,” said Mr Gressly.

Linda Thomas-Greenfield, US ambassador to the UN, praised the global response, stating that without decisive action, the shores of the Horn of Africa and Arabian Peninsula would have been “polluted, exposing communities to deadly toxins, and contaminating drinking water supplies for the entire region”.

“At a time when the world faces a host of pressing crises, this is a bright spot, and a model example of international co-operation,” she said.

The operation began after a technical support ship arrived on site off the coast of Ras Isa at the end of May.

UN officials and the international community have been warning for years that the Red Sea and Yemen's coastline were at risk.

Earlier Yemen's Foreign Minister Ahmed bin Mubarak had said on Twitter that the oil removal would be completed by the end of the day “after major UN and international operations”.

“The first goal was the success of the operation to save seas, coasts and beaches of Yemen and the countries of the region from an imminent environmental disaster,” he said.

The Iran-backed Houthi rebels were obstructing national and international efforts to address this disaster, the Foreign Minister said.

Remaining risk

Experts are warning that a risk remains if the oil is not completely taken off the water.

“If the Nautica moved with the oil on board, then we got rid of the problem. But if it remains, which seems likely to happen, then we have not got rid of the problem but simply moved the oil from one ship to another – therefore giving the Houthis control of two vessels,” the former head of Yemen's Environment Protection Agency Abdelqader Al Kharraz told The National.

The Nautica, although decades younger than the Safer, is 15 years old – and has roughly five years left in its lifespan.

Maritime law expert Ian Ralby said that although the main risk of an oil spill has been averted, the will to completely resolve the environmental issue must remain until a more long-term solution is reached.

“We must maintain vigilance in pursuing a complete and permanent resolution of this matter and ensuring that the oil … gets off the water and a permanent replacement of the facility is actually established on land and out of harm's way of the Red Sea.”

The risk, Mr Ralby said, lies largely with the oil's geographical location.

“We're talking about a coastal area of a country that's been at war since 2015. There are still mines in the sea and opportunities for upticks in violence that we've seen in the past year, and specifically targeted towards oil tankers,” he said referring to recent Houthi attacks on oil terminals.

“And so, whereas yes, we now have a much lower risk of a spill caused by the deterioration of a vessel, there's still a chance of a problem that arises from an attack on it. As a sitting target, there's an opportunity [for parties] to try to spark a new conflict or change the course of where things are heading.”

For years the tanker was at risk of breaking up or exploding after it was left unattended and decaying following the outbreak of war in Yemen in 2014.

The UN launched a fund-raising drive, even starting a crowdfunding campaign, to raise the $129 million needed to transfer the oil from the Safer to the Nautica, which sailed from China in early April.

The salvage operation cannot be paid for by the sale of the oil because it is not clear who owns it, the UN said.

Initiatives geared to political process have gained momentum since Riyadh and Tehran in March agreed to restore diplomatic ties severed in 2016.

The Houthis seized the capital, Sanaa, in 2014. A year later, a Saudi-led coalition intervened at the invitation of the government.

England ODI squad

Eoin Morgan (captain), Moeen Ali, Jonny Bairstow, Jake Ball, Sam Billings, Jos Buttler, Tom Curran, Alex Hales, Liam Plunkett, Adil Rashid, Joe Root, Jason Roy, Ben Stokes, David Willey, Chris Woakes, Mark Wood.

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Algae, waste coffee grounds and orange peels will be used in the pavilion's walls and gangways

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Roughly 15 tonnes of steel will be used

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UAE currency: the story behind the money in your pockets

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.”

Updated: August 11, 2023, 6:14 PM