Bahrain Petroleum (Bapco), the state oil company, is speeding up work on a refinery ahead of an expected cash injection for the kingdom from a GCC fund.
In March, the four wealthier Gulf nations put together a US$20 billion (Dh73.45bn) fund to funnel money to Oman and Bahrain.
Although no money has specifically been set aside for oil projects, Bapcohas cited the expected influx as a reason to accelerate an overhaul of the country's only refinery, with external risk evaluations and financing scheduled to begin next month.
"The board has instructed us to develop and implement the project faster," said Essa al Ansari, the general manager for major engineering projects at Bapco.
"If they offer you all these billions, [you have to] show that you have a way to spend it wisely … you've got to demonstrate that."
The GCC fund was widely interpreted as an attempt to quell social unrest, some of which occurred in the kingdom.
Bahrain relies on Saudi Arabia to supply the oil that it refines and exports.
Bapco suffered losses of US$15.9 million (Dh58.4m) in the first quarter of this year.
Dr Abdulhussain bin Ali Mirza, the Bahraini oil minister and the chairman of Bapco, said the company had sacked 293 employees for protesting against the government and going on strike.
The move came after a parliamentary investigation into absenteeism among Bapco employees that ended last week.
Bapco's refinery in the eastern town of Sitra had been a focal point for striking staff. At the height of protests in March, the facility was reportedly operating at a tenth of its total capacity of 267,000 barrels per day (bpd). The company has since returned production to pre-protest levels.
The planned refinery upgrades are intended to improve energy efficiency, curb emissions and expand capacity to between 350,000 and 450,000 bpd, said Mr al Ansari.
Bapco has brought in two international firms to conduct a risk analysis and due diligence, and is expected to call in a third company to evaluate potential sources of financing such as export-import agencies and fresh bank loans.
The unrest in Bahrain will not hamper Bapco in its attempts to secure funding from foreign lenders or technology from international oil companies, said Mr al Ansari.
"We are not looking for partners," he said on the sidelines of a petrochemicals conference in Abu Dhabi. "This is our refinery. If there is any risk, we take it. The recent unrest has nothing to do with it at all."
Mr al Ansari said he expected the external evaluations to be completed within six months and a construction contract to be awarded in 2014.
An expansion in refining capacity would hinge on plans for an estimated $350m pipeline to replace an existing pipeline that is more than a half century old.
The new pipeline is expected to deliver more crude and bypass population centres.
ayee@thenational.ae
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This year’s winners of the US$4 million Sheikh Zayed Future Energy Prize will be recognised and rewarded in Abu Dhabi on January 15 as part of Abu Dhabi Sustainable Week, which runs in the capital from January 13 to 20.
From solutions to life-changing technologies, the aim is to discover innovative breakthroughs to create a new and sustainable energy future.
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Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
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MATCH INFO
Syria v Australia
2018 World Cup qualifying: Asia fourth round play-off first leg
Venue: Hang Jebat Stadium (Malacca, Malayisa)
Kick-off: Thursday, 4.30pm (UAE)
Watch: beIN Sports HD
* Second leg in Australia scheduled for October 10
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
- Never over populated areas
- 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
KILLING OF QASSEM SULEIMANI
Tuesday results:
- Singapore bt Malaysia by 29 runs
- UAE bt Oman by 13 runs
- Hong Kong bt Nepal by 3 wickets
Final:
Thursday, UAE v Hong Kong
