Abu Dhabi’s state fund is looking to expand its energy investments, with US$5 billion spent in the past few months in nations that can offer low costs such as the US, according to the head of Mubadala Investment Company’s oil and chemicals projects.
“If you think about the low cost environment, the US ranks very high because of the feedstock,” Musabbeh Al Kaabi, the chief executive overseeing Mubadala’s petroleum and petrochemicals, said in Abu Dhabi. “The natural gas is relatively attractive and the expansion in the petchem in the US is big.”
The current oil price is good for oil and gas investment, Al Kaabi said in the emirate where hundreds of energy executives were meeting at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec), which runs until Thursday. Oil demand is “exceeding our expectation”, he said. In recent months, Mubadala has spent $1.7bn on a chemicals joint venture in the US with Borealis and Total, and an additional $2.1bn on chemicals in Louisiana. It is also expanding in Vietnam.
Brent crude, a global benchmark, has climbed the past five consecutive weeks, and is trading close to the highest in two years.
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Mubadala manages about $125bn in assets after the merger this year of two state investment companies with holdings from aerospace to energy to infrastructure. The government-owned investment vehicle is reviewing its portfolio as a step toward the possible sale of some businesses or holdings, people familiar with the matter said this month.
The company is now producing about 500,000 barrels of crude a day, with major projects in South East Asia and North America, Mr Al Kaabi said. “We believe in the energy landscape in the US,” he said.
Mubadala Petroleum is looking to expand operations in Thailand, the UAE Energy Minister Suhail Al Mazrouei said on November 2. The company also owns an enhanced oil recovery project in Oman, according to its website.
Abu Dhabi holds about 6 per cent of the world’s proven oil reserves. Mubadala - the world’s 14th-largest fund, according to the Sovereign Wealth Fund Institute - is part of the emirates effort to turn oil revenue into profitable investments while also attracting technology and jobs. It completed a merger with Abu Dhabi’s International Petroleum Investment Co earlier this year.
