x Abu Dhabi, UAEWednesday 24 January 2018

Wealth fund to be 'active' in economy

Abu Dhabi's state-run International Petroleum Investment Co will pay cash for its 70 per cent stake purchase in Germany's MAN Ferrostaal.

Abu Dhabi's energy sovereign wealth fund is abandoning its role as a "passive" investor and is now aggressively integrating foreign companies into the emirate's economy, the head of the International Petroleum Investment Company (IPIC) said yesterday. In a rare press briefing to announce the acquisition of MAN Ferrostaal, a German engineering firm, Khadem al Qubaisi, IPIC's managing director, said his US$15 billion (Dh55bn) fund would continue its vigorous expansion to more than $20bn in five years in spite of the downturn in the global economy. "When we started, we were very passive," he said. "Now we are looking for consolidation, we are looking to really benefit from the companies we are involved in." Since its establishment in 1984, IPIC had traditionally focused on buying minority stakes in foreign assets, but it now plays a direct role in the emirate's economy through an upcoming petrochemical complex at Taweelah and a crude oil pipeline to Fujairah. "While in the past, IPIC's investment strategy focused exclusively on the hydrocarbon sector outside of Abu Dhabi, things are now changing," Mr al Qubaisi said. Construction of the $20bn Chemaweyaat petrochemical complex, being built in partnership with the Abu Dhabi Investment Council and the Abu Dhabi National Oil Company, will be managed by MAN Ferrostaal. The crude oil pipeline will transport 1.5 million barrels per day of crude from the Habshan field in Abu Dhabi to the Port of Fujairah, where storage tanks will hold up to 12 million barrels of oil, he said. The pipeline, scheduled to be completed by the beginning of next year, will allow tankers to load Abu Dhabi's oil without passing through the Strait of ­Hormuz. Although renewable energies may eventually make up 10 per cent of IPIC's investment portfolio, its focus remained on oil, gas and chemicals, Mr al Qubaisi said. "Mubadala is representing the new energy vision for Abu Dhabi," he said, in reference to the Government-backed development fund which owns Masdar, the Abu Dhabi Future Energy Company. "We are investing in the refineries more, the petrochemicals more - old energy, I guess." IPIC last year bought companies as diverse as Energia de Portugal, a Portuguese utility, and Aabar, a UAE investment firm with a focus on property. But because of the economic downturn, the fund would have to look carefully at how to consolidate foreign assets to the benefit of Abu Dhabi, Mr al Qubaisi said. cstanton@thenational.ae