ADNOC planning to expand output by 14%



The Abu Dhabi National Oil Company (ADNOC) plans to expand production from onshore oil wells by 14 per cent in five years, and has identified at least one site to inject captured carbon dioxide. Abdul Munim al Kindy, the general manager for the Abu Dhabi Company for Onshore Oil Operations (ADCO) told the company's in-house publication in an interview released today that 197,000 barrels per day (bpd) would be added to onshore production capacity by 2013. The company has set a long-term goal of increasing capacity from the present level of between 1.3 million and 1.4 million bpd to 1.8 million bpd by 2017. The initial expansion would be led by a US$4.5 billion (Dh16.52bn) upgrade to three ageing fields that would add 100,000 bpd, to production capacity, Mr Kindy said. "ADCO is entrusted with sustaining a level of production for a long plateau period," he said. "A lot of investment and effort is needed to maintain current sustainable rates; this effort is unfortunately not well recognised in the market." An additional 227,000 bpd would be added in two stages - by 2014 and 2017, he said. The company accounts for 60 per cent of the emirate's oil production, with 20 per cent of that destined for the domestic market. Mr Kindy said ADCO was also moving forward with plans to inject carbon dioxide into ageing onshore wells, increasing their production as well as substituting it for natural gas, which is needed across the country to produce electricity. The Abu Dhabi Future Energy Company (Masdar), has plans to develop an emirate-wide system to capture carbon dioxide from a power plant, aluminium smelter and steel plant - all likely to be located in Taweelah - and sell it to Adnoc for injection into oil reservoirs to increase well pressure. The scheme is being promoted as a way to reduce the emirate's carbon footprint at the same time as it boosts oil and electricity production. Mr Kindy said ADCO needed to study carbon dioxide's effects on the company's reservoirs before moving forward with the carbon capture scheme. Carbon dioxide has been injected into sandstone oil reservoirs in Texas and other parts of the US for years, but the technology has not been used extensively with carbonate reservoirs, the geology type found in Abu Dhabi. "There are also great risks that need to be evaluated. One such ADCO [carbon dioxide] project, the type we envisage for North East Abu Dhabi fields, is equivalent to all North America [carbon dioxide] projects combined." ADCO has previously said it was working with Masdar to study the possibility of using carbon dioxide in oil wells, but has never identified the specific reservoirs targeted by the scheme. The North East Abu Dhabi fields include Al Dhabiya, Rumaitha and Shanaget, and are located near the coast about 50km south-west of the capital. cstanton@thenational.ae

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In numbers: PKK’s money network in Europe

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Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

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Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

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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.”

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Yahya Al Ghassani's bio

Date of birth: April 18, 1998

Playing position: Winger

Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda