A suspected underwater sabotage attack off Europe's shores left politicians, security officials and scientists looking for answers on Wednesday to the mystery of what happened to two majority Russian-controlled pipelines leaking gas into the Baltic Sea.
What do seismologists know?
Underwater blasts appear to have rattled the Baltic seabed shortly before the pipeline leaks were discovered, adding to the suspicion of sabotage.
The tremors were picked up by scientists in Germany, Denmark and Sweden, who described two separate spikes on their seismographs on Monday.
Denmark’s geological survey said they appeared to be man-made and matched the locations where leaks were reported on the Nord Stream pipelines.
“The signals from the tremors do not resemble earthquakes,” it said. "The signals are instead comparable to the signals seen in explosions."
The first had a magnitude of 2.3, equivalent to a small earthquake that might occasionally be felt on land, and was picked up by a number of measuring stations.
Bjorn Lund, from the Swedish National Seismic Network, told broadcaster SVT that there was “no doubt that it was a blast or an explosion”.
German research centre GFZ also detected two spikes but would not be drawn on the nature of the tremors.
What happened to the pipelines?
Two leaks were reported on Nord Stream 1 and one on Nord Stream 2, all in Danish and Swedish waters.
The two parallel pipelines lost pressure and started leaking gas after suffering what was presumed to be substantial damage.
Images taken from Danish military aircraft showed a turbulent Baltic surface near where Nord Stream 2 was leaking. Ships were told to steer clear for fear of losing buoyancy in the water.
There were also environmental fears, especially with methane — the main component of natural gas and a potent greenhouse gas — leaking into the atmosphere from the broken pipes.
Sascha Boden, a climate and energy expert in Germany, estimated that the leak would be equivalent to 15 million tonnes of carbon dioxide entering the atmosphere, though some of the methane might dissolve in the water.
The owners of Nord Stream 1, in which Russian exporter Gazprom holds a majority stake, said it was not possible to say how long repairs would take. Gazprom is the sole shareholder in Nord Stream 2.
How have politicians reacted?
Nato and the European Union described the leaks as intentional. EU foreign policy chief Josep Borrell said any deliberate attack on energy infrastructure would be “met with a robust and united response”.
Denmark, among the first to say it suspected sabotage, sent naval vessels and helicopters to the site of the Nord Stream 2 leak and set up an exclusion zone within five nautical miles (9.3 kilometres) of the source.
Sweden said the leaks were caused by detonations and that it could not rule out “any cause, actor or motive” behind the suspected sabotage. The US and Britain said they were awaiting further inquiries.
While diplomats generally held back from assigning blame to any country, there was much speculation among politicians and commentators that Russia might be behind the leaks.
Why would Russia attack its own pipelines?
A theory doing the rounds in Germany and Poland is that the leaks were a warning shot by Russia, designed to spook Europe with the prospect that other, more critical energy pipelines could suffer the same fate.
Metin Hakverdi, an MP in Chancellor Olaf Scholz’s party, suggested it was an “act of deterrence” by Russia, while opposition MP Roderich Kiesewetter, a former army officer, highlighted Russia’s record of shadowy operations.
“It is likely that Russia is trying on the one hand to sow unease in the European population, and on the other hand to signal on a state level the threat of an attack on critical infrastructure,” Mr Kiesewetter told German radio.
There were raised eyebrows in Poland at the timing of the apparent sabotage just as a new trans-Baltic route was opened between Poland, Denmark and Norway, designed to cut Russia out of the European gas market.
“We see clearly that it’s an act of sabotage, related to the next step of escalation in the situation in Ukraine,” said Polish Prime Minister Mateusz Morawiecki.
With the EU apparently resolved that “the era of Russian fossil fuels in Europe will come to an end”, as European Commission President Ursula von der Leyen has often said, the pipelines are of less use to Russia than they once were.
Russia stopped delivering gas via Nord Stream 1 last month, while Nord Stream 2 has lain idle since Germany suspended the project in February.
For its part, the Kremlin on Tuesday said accusations against Russia were “predictable and predictably stupid”.
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.”
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
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- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
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Company profile
Company name: Suraasa
Started: 2018
Founders: Rishabh Khanna, Ankit Khanna and Sahil Makker
Based: India, UAE and the UK
Industry: EdTech
Initial investment: More than $200,000 in seed funding
The specs: 2018 Jeep Compass
Price, base: Dh100,000 (estimate)
Engine: 2.4L four-cylinder
Transmission: Nine-speed automatic
Power: 184bhp at 6,400rpm
Torque: 237Nm at 3,900rpm
Fuel economy, combined: 9.4L / 100km
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