VIENNA // Opec ministers agreed to keep their daily crude production target unchanged at a meeting yesterday. But in a sign of internal rivalries, they failed to reach consensus on a new secretary-general, a post sought by Saudi Arabia, Iran and resurgent oil-power Iraq.
Libya's Abdullah Al Badry will remain secretary-general of 12-nation Organization of the Petroleum Producing Countries - the public face of the organisation between ministerial meetings and a symbol of the cohesion the group likes to project despite persistent internal rivalries. The meeting extended his tenure for a sixth year, making him one of the longest-serving officials in that post in Opec's history
"Everything will stay as it is," Saudi Arabian oil minister Ali Al Naimi said in Vienna. "We respond to customer demand. Whatever the customers want, we will give them."
"We have an experienced secretary-general in position, extending it one year is a very, very good decision," he said.
Saudi Arabia, Opec's top producer and de-facto decision maker, had nominated Majid El Muneef, a senior petroleum expert and a member of Opec's governing board, to be secretary-general. Arch-rival Iran had proposed its former oil minister Gholam Hossein Nozari, while Iraq had nominated its ex oil minister Thamir Ghadban.
Their failed candidacies reflected the divisions between Opec major member states, despite the cartel's outward show of unity.
A choice between Iran and the Saudis - whose disputes extend beyond oil dominance to regional political rivalries - would have further polarised the organisation. Iraq, which is vying to outproduce the Saudis in the next decade, also was considered by some members to have its own agenda instead of wanting to serve Opec.
The agreement to leave the production ceiling at 30 million barrels a day was expected. Actual output, however, is a million barrels higher because some countries produce above their limits.
Opec is expected to continue breaching the ceiling, despite a plentiful world supply of oil. Robust US production and anaemic world demand due to flagging economic growth have added to the mix, resulting in unusually high crude inventories.
Opec predicts even less demand for its oil next year in part because of consuming countries' weak economies - a concern the organisation addressed in a post-meeting statement as the "biggest challenge facing global oil markets in 2013".
Yet prices remain relatively high. The average cost of the group's oil basket - a mix of grades produced by Opec countries - has been above US$100 (Dh367) a barrel for the last two years, a first in Opec's history. Brent crude, which is used to price international varieties of oil, has also been well over $100 a barrel for this year and was trading at $109.63 yesterday, up $1.62 on the day.
Such levels cover production costs for most Opec countries with room for profits, leaving Opec ministers comfortable with the present output arrangement.
Opec announced its decision to leave the output ceiling unchanged in a statement.
"We are seeing some challenges for 2013, like the US fiscal cliff and the debt crisis in Europe," Mr Al Badry said in a press conference after yesterday's decision. "But we see some light at the end of the tunnel by the end of 2013, with China growth and a solution of the fiscal cliff situation in the US."
The producer group, founded in 1960, comprises Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the UAE and Venezuela. Opec will meet next on May 31 in the Austrian capital.
* Associated Press and Bloomberg
MATCH INFO
Barcelona 5 (Lenglet 2', Vidal 29', Messi 34', 75', Suarez 77')
Valladolid 1 (Kiko 15')
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
The Freedom Artist
By Ben Okri (Head of Zeus)
THE BIG THREE
NOVAK DJOKOVIC
19 grand slam singles titles
Wimbledon: 5 (2011, 14, 15, 18, 19)
French Open: 2 (2016, 21)
US Open: 3 (2011, 15, 18)
Australian Open: 9 (2008, 11, 12, 13, 15, 16, 19, 20, 21)
Prize money: $150m
ROGER FEDERER
20 grand slam singles titles
Wimbledon: 8 (2003, 04, 05, 06, 07, 09, 12, 17)
French Open: 1 (2009)
US Open: 5 (2004, 05, 06, 07, 08)
Australian Open: 6 (2004, 06, 07, 10, 17, 18)
Prize money: $130m
RAFAEL NADAL
20 grand slam singles titles
Wimbledon: 2 (2008, 10)
French Open: 13 (2005, 06, 07, 08, 10, 11, 12, 13, 14, 17, 18, 19, 20)
US Open: 4 (2010, 13, 17, 19)
Australian Open: 1 (2009)
Prize money: $125m
The First Monday in May
Director: Andrew Rossi
Starring: Anna Wintour, Karl Lagerfeld, John Paul Gaultier, Rihanna
Three stars
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
PFA Team of the Year: David de Gea, Kyle Walker, Jan Vertonghen, Nicolas Otamendi, Marcos Alonso, David Silva, Kevin De Bruyne, Christian Eriksen, Harry Kane, Mohamed Salah, Sergio Aguero
Tom Fletcher on 'soft power'
'Brazen'
Director: Monika Mitchell
Starring: Alyssa Milano, Sam Page, Colleen Wheeler
Rating: 3/5
More about Middle East geopolitics
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.”
The view from The National
RESULTS
6.30pm: Handicap (TB) $68,000 (Dirt) 1,600m
Winner: Hypothetical, Mickael Barzalona (jockey), Salem bin Ghadayer (trainer)
7.05pm: Meydan Sprint – Group 2 (TB) $163,000 (Turf) 1,000m
Winner: Equilateral, Andrea Atzeni, Charles Hills
7.40pm: Curlin Stakes – Listed Handicap (TB) $88,000 (D) 2,200m
Winner: New Trails, Fernando Jara, Ahmad bin Harmash
8.15pm: UAE Oaks – Group 3 (TB) $125,000 (D) 1,900m
Winner: Mnasek, Pat Dobbs, Doug Watson
8.50pm: Zabeel Mile – Group 2 (TB) $163,000 (T) 1,600m
Winner: D’bai, William Buick, Charlie Appleby
9.25pm: Balanchine – Group 2 (TB) $163,000 (T) 1,800m
Winner: Summer Romance, James Doyle, Charlie Appleby
10pm: Al Shindagha Sprint – Group 3 (TB) $130,000 (D) 1,200m
Winner: Al Tariq, Pat Dobbs, Doug Watson
