Oil production in the Middle East declined by 250,000 barrels per day in 2017 with the biggest drop in eight years coming coming from Saudi Arabia, Kuwait and the UAE, according to BP's Statistical Review of World Energy.
Much of the decline has been a result of continued compliance undertaken by Saudi-led Opec as well as non-members led by Russia over the last year.
“The Vienna group had a target of 1.8 million bpd, but in practice the production cuts have far exceeded that with cuts totalling nearly 2.5 million bpd,” Spencer Dale, BP’s chief economist said at a press briefing in London.
Vienna-based Opec and its partners in the global oil pact have cut production since January last year and extended the agreement till the end of this year. The curbs have help bring down oil inventories to below their five-year average, according to Opec, and helped shore up oil prices to touch a three-year high of $80 a barrel last month.
BP’s annual statistical review, which serves as a bellwether for the global energy industry, noted in its latest report that global oil production rose 600,000 bpd in 2017 below the 10-year average for the second consecutive year. Tight oil flowing from the US at an average of 690,000 bpd as well as revival of output from Libya at around 440,000 bpd were the largest increases. Opec members Saudi Arabia and Venezuelan production registered the largest declines of 450,000 bpd and 280,000 bpd respectively.
The Middle East, which accounts for 34 per cent of global oil production and 45 per cent of all crude oil exports, saw oil consumption increase by 1.4 per cent, which was below the ten year average. Growth largely came from an increase in consumption in Iran of around 5.4 per cent to 1.81 million bpd, while consumption in the region’s biggest exporter Saudi Arabia reached 3.91 million bpd - its biggest decline of 0.5 per cent since 1995.
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Meanwhile, growth in oil output in the region saw biggest increases from Iran, which grew 8.2 per cent to reach 4.98 million bpd as well as Iraq, which grew 2.2 per cent over the last year to reach 4.52 million bpd in 2017.
Gas production in Iran, which has the largest reserves globally for the resource, increased 10.5 per cent, above the 10-year average of 6.3 per cent, to reach 223.9 billion cubic metres in 2017.
Gas fared better than oil in the Middle East, with overall regional production rising 4.9 per cent to reach 659.9 bcm, compared with 574 bcm in 2016.
Egypt, which BP includes as part of the African region, contributed to much of the growth from the continent, with output rising 22 per cent to reach 49 bcm, driven mainly by production coming online from its Zohr gas field in the Mediterranean. Iraq, which made several attempts to reduce flared gas emissions and revamp its power sector last year, saw the biggest increases in regional gas consumption, growing 21.2 per cent to reach 12 bcm. Gas production in the UAE meanwhile declined 0.2 per cent to reach 72.2 bcm.
Overall energy consumption in the region rose 3.4 per cent, below the 10-year average, driven largely by consumption of both oil and gas in Iran. Both fossil fuels accounted for 98 per cent of the regional energy mix and 95 per cent of power generation.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
RESULTS
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NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
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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.”
The biog
Full name: Aisha Abdulqader Saeed
Age: 34
Emirate: Dubai
Favourite quote: "No one has ever become poor by giving"
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
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The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
