Abu Dhabi’s global quest

zoom

zoom

Peter Barker-Homek, TAQA CEO. The government holds a 75% stake in TAQA.

zoom

Ahmed Ali Al Sayegh is the CEO of Dolphin Energy, wholly owned by Mubadala.

Written off as too ambitious 12 years ago, the Emirate's investment vehicles have taken the industry by storm.

When the International Petroleum Investment Company (IPIC) of Abu Dhabi started purusing the acquisition of a stake in Borealis in early 1996, industry experts termed the move as too ambitious.

They were simply not aware of a strong desire brewing in the hearts and minds of the emirate's emerging leaders to become global players by making use of one of the world's largest reserves of hydrocarbons bestowed upon them by mother nature.

Today, state-owned and privately-backed companies and investment funds from Abu Dhabi are some of the most aggressive asset-hungry players in the world.

The list of global acquistions is getting longer by the day, thanks to windfall earnings from high prices of crude oil in recent years and returns from well-adviced investment portfolios of Abu Dhabi Investment Authority (ADIA) and its affiliates over the last 25 years.

At the centre of Abu Dhabi's quest for global energy assets and partnerships are IPIC and Mubadala Development Company. Both companies are wholly-owned by the government of Abu Dhabi.

They have recently been joined by Abu Dhabi National Energy Company (Taqa), in which the government holds a 75% controling stake. IPIC says it is working on expanding its investment portofolio to more than $40 billion over the next four-five years. It already holds stakes in refining and petrochemcial companies that yield combined revenues of over US $50 billion

IPIC's global portfolio includes stakes in Austria's OMV, Cepsa of Spain, Pak-Arab Refinery (PARCO) in Pakistan, as well as refinery and petrochemicals companies in Japan and Oman. It may also build a partnership with Wintershall of Germany for exploration in the regional markets.

Mubadala made its mark with the Dolphin gas project, initiated by the UAE Offsets Group in March 1999 in partnerhsip with the now defunct Enron, and Total of France. Enron's 24.5% stake in Dolphin was sold to Occidental Petroleum, which has entered into several other joint ventures with Mubadala.

Both IPIC and Mubadala have agreements with Shell and Occidental for training and serach for innovative technologies and are now increasingly becoming active in the local and regional upstream and downstream sectors. Some industry analysts see the growing involvement of IPIC and Mubadala as competition, but those who have witnessed Abu Dhabi's journey from rags to riches think differently.

"When the Offsets Group started talking about the Dophin project, it was viewed as an encroachment on ADNOC's [Abu Dhabi National Oil Company] territory but the project has created immense value for the UAE and Oman and has set an example of how calculated bold steps could bear good results," says an official at an international oil company (IOC) in Abu Dhabi. "The slow pace of Abu Dhabi is a thing of the past, the key word today is aggression and quick action."

Ambitious TAQA

TAQA has the ambition to become a global leader in the energy sector. Set up in 2005 as a public joint stock company, it is owned 51% by Abu Dhabi Water and Electricity Authority (ADWEA) and already has operations in nine countries around the world including the Netherlands, the UK, Canada, South Africa, Morocco, Ghana and India.

Aside from oil and gas assets, it has interests in power generation, combined heat and water, desalination, structured finance and services. It has total assets of $18.5 billion and annual revenues exceed $2.26 billion.

Print | Email | Discuss this article |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM