The International Petroleum Investment Company (Ipic), an Abu Dhabi Government investment fund, and the government of Kazakhstan will invest US$1 billion (Dh3.67bn) in oil and gas projects in the Central Asian country. The newly created Falah Fund's launch comes a week after Sheikh Khalifa bin Zayed, President of the UAE and Ruler of Abu Dhabi, concluded a three-day visit to Kazakhstan amid a blossoming of cultural and economic ties between the two oil exporting countries. "The Falah Fund investment positions Ipic at the core of the CIS [Commonwealth of Independent States], with partners who already know the territories and the opportunities in this resource-rich, relatively undeveloped region," Ipic said yesterday. The Falah fund will be half owned by Ipic and various entities in Kazakhstan's government will take the remaining shares. Much like the UAE, the Kazakh economy is booming on the back of record revenues from oil and gas. Earlier this year, the two governments announced the creation of a $4bn fund to invest in projects in Kazakhstan and abroad. Ipic has already said it would invest $5bn in a petrochemical plant in the western part of the country. Kazakhstan has a relatively undeveloped downstream oil and gas sector and welcomed the infusion of cash, said Aidarbek Toumatov, the minister counsellor at the Kazakhstan Embassy. He singled out the petrochemical plant investment as a key part of the infrastructure buildup. "We are planning to build several such chemical plants in Kazakhstan. This will be the first one," he said. Kazakhstan, about half the population of which is Muslim, sees itself as a bridging point between East and West, and officials believe it could learn from the experience of the UAE in diversifying its economy away from oil and gas. Emirati companies have already invested billions of dirhams in property, a mosque, transport, aluminium and clay projects in the country. Kazakhstan could also exploit its status as a major wheat exporter to become a key food supplier to the UAE, analysts said. Ipic has grown in prominence in the past few years as it has recycled increasing amounts of UAE oil revenues into energy related investments. Khadem al Qubaisi, the managing director, said Ipic generated a profit of $1.2bn last year on total investments of $14bn. "We have built our portfolio - now worth around $14bn - with synergistic potential as well as commercial return in mind," he said. "Ipic's portfolio has significantly outperformed the S&P Energy 500 over the last five years, and we are very proud of this accomplishment." In the next several years, Mr Qubaisi said he hoped the size of Ipic's portfolio would triple, riding the wave of a favourable international investment climate for hydrocarbons. In the near future, he added, Ipic would occupy its own 36-storey building in Abu Dhabi. Ipic's most recent venture was the creation of a $1.5bn fund in partnership with Man Investments to put money into regional projects to capture natural gas, which is extracted in association with oil and normally burnt as a waste product. The company is also building oil refineries in Pakistan and Morocco and holds a two per cent stake in Energia de Portugal, the largest Portuguese utility. In March, Ipic said it was teaming up with the Qatar Investment Authority to create a $2bn fund to invest in the energy sector. Closer to home, Ipic is building what it has described as the largest integrated chemical complex in the world at Taweelah - in partnership with the Abu Dhabi Investment Council and Borealis, an international plastics maker - in which it owns a 65 per cent share. The company's foray into Kazakhstan will almost certainly be followed by other Emirati companies. The UAE is now the main trade partner for Kazakhstan in the region. Statistics from the Kazakh foreign ministry show trade between the two countries stood at $303 million last year, and $139.7m between January and May this year. The BP Statistical Review, an authoritative source on world oil reserves, said Kazakhstan had 39.8 billion barrels of proved reserves of oil, which would make it the world's ninth-largest holder of oil, above Nigeria and behind Libya. The review said the UAE had 97.8 billion barrels. Additional reporting by Amena Bakr email@example.com firstname.lastname@example.org
- Most Viewed
- Most Commented
- Abu Dhabi warned rising rents could drive low-paid workers out of UAE
- Abu Dhabi tenant gives notice but landlord wants to cash postdated cheque from closed account
- Dubai’s first Bitcoin ATM opens up currency debate
- Gate Towers Penthouse Collection on Reem Island launched by Aldar
- In pictures: Aldar’s Gate Towers Penthouse Collection on Reem Island
- Most Viewed
- Most Commented
- History shines light on the true borders of Palestine
- American ‘has UAE Embassy documents’ to back up medicinal marijuana claim
- Nakheel to sell plots for hotels and resorts on Dubai’s Deira Islands
- UAE’s healthcare system must grant equitable access to all
- FNC member says unmarried UAE women creating ‘financial burden’
In pictures: Cityscape Abu Dhabi 2014 opens
Key developments and master plans are being unveiled at this year’s property exhibition in the capital.
In pictures: Where Abu Dhabi rents have risen and fallen, Q1 2014
Find out how rental prices in the prime locations in Abu Dhabi have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.
Futuristic Abu Dhabi park to be built in the desert shade
Spread over 125,000 square metres, Al Fayah Park, on Airport Road, will be covered by a sand-coloured canopy, 20 metres high, with the appearance of cracked desert land from above.
In pictures: Aldar’s Gate Towers Penthouse Collection on Reem Island
Aldar launched its Gate Towers Penthouse Collection at Cityscape Abu Dhabi. The launch features 21 penthouses spanning the skybridge, with each having a private indoor pool and incredible views.
April corporate and economic calendar for the UAE and overseas
From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.
Rates report: Latest on UAE loans, accounts and credit cards
Souqamal.com brings you the latest interest rates on banking products in the UAE.