x Abu Dhabi, UAEWednesday 26 July 2017

No relief for embattled BP but Dubai has lost none of its pizzazz

There is big trouble brewing for BP in Central Asia, a region that has not always been lucky for the British oil giant.

There is big trouble brewing for BP in Central Asia, a region that has not always been lucky for the British oil giant.

Following its continuing and well-profiled troubles in Russia, BP was on the receiving end of a lambasting from another former Soviet state last week.

This time it was president Ilham Aliyev of Azerbaijan's turn to let loose on BP, over its alleged failure to deliver on gas supplies from one of the huge fields it operates in the Caspian Sea and delivers onshore to Baku.

Mr Aliyev shocked oil industry observers by claiming that BP had failed to deliver for several years in the quantities it had promised, and that the country was some US$8 billion (Dh29.38bn) worse off as a result.

Mr Aliyev threatened "serious measures" against BP if the state of affairs was not put right. Coming from the Azerbaijan hard man, that was the equivalent of his saying: "Nice little oil company you've got here, shame if anything should happen to it".

The bust-up is all the more surprising because BP has been hand in glove with the Aliyev regime in Azerbaijan since it signed the "contract of the century" with the president's father Heydar in 1994 that began the boom in Baku oil.

But Ilham Aliyev's regime is coming under financial pressure at home. Large swaths of Baku were expensively rebuilt for the Eurovision Song Contest earlier this year, and now Mr Aliyev is committed to a massive capital outlay to build by 2020 the Azerbaijan Tower, which would dwarf the Burj Khalifa as the world's tallest building.

***

Talking of big projects, it's good to see Dubai has lost none of the pizzazz that made it the glitzy hub of the Arabian Gulf before the global crash in 2008 temporarily trimmed its ambitions.

Projects such as the four-times life-size Taj Mahal to be built at a cost of $1bn in Falcon City in Dubailand, and the revived plans for a canal to link Business Bay to the Gulf, show that the pioneering spirit of the city's visionary planners is undimmed even in these rather more cash-strapped times.

The canal in particular is intriguing, and will present some major challenges. It will cross three big thoroughfares, Sheikh Zayed, Al Wasl and Jumeirah. Still, the budgeted $400 million seems comfortably enough to cover that cost, and looks good value compared with the Taj.

One unexpected beneficiary of the canal's exciting opportunities will be the Al Habtoor Group, which is planning a stock market listing in Dubai and possibly London or Riyadh next year.

The site of Habtoor's old Metropolitan hotel lies right next to the proposed path of the new canal, before it winds its way through Safa Park, down through Jumeirah and into the sea.

So the new hotel, retail and leisure complex planned to replace the Metropolitan - at a cost of $1.33bn - will have the added benefit of canal-side facilities, floating restaurants and some pricey property as well.

It's all coming together nicely.

***

"Overheard in the Goldman Sachs elevator" is truly the only Twitter site worth following seriously.

Executive number one: "Haircuts are the ultimate economic indicator. In bad times, it's every eight weeks, in good times it's every six."

Executive number two: "I go every three weeks."

fkane@thenational.ae