Iraq is set to boost its oil export capacity significantly by the end of the first quarter next year, stepping up competition with the leading exporter Saudi Arabia to grab a bigger share of the growing Asian market.
Iraq is wooing Asian customers by offering easier payment terms to secure buyers as it ramps up oil output after years of war, but inadequate infrastructure and security issues this year have hampered efforts to maintain steady output and exports.
The country is planning to raise its total export capacity to 4 million barrels per day (bpd), the deputy prime minister for energy Hussain Al Shahristani said yesterday.
“In total, we will be having capacity of 4 million barrels (per day) next year,” he said on the sidelines of the World Energy Congress in South Korea. “By the end of the first quarter we should have them.”
Iraq’s current oil output is now back up to 3.3 million bpd of crude, and may touch 3.5 million bpd by year-end. Iraq is exporting 2.5 million bpd of its output, with 60 per cent going to Asia, 20 per cent to the American market and the rest to Europe, he said.
Output at Iraq’s giant Majnoon oilfield, run by Royal Dutch Shell, will reach 175,000 barrels a day by the end of this month, said Mr Al Shahristani.
Iraq’s total storage capacity has been recently raised to more than 7 million barrels, Mr Al Shahristani added.
Iraq’s terminal upgrading activity this year and other work to improve its export capacity have sharply reduced its exports in some months this year.
Exports fell to 2 million bpd in September, the lowest rate in 19 months, as the terminal repair and expansion work reduced shipments of Basra Light crude, which accounts for most of Baghdad’s export revenue.
Opec, which pumps more than a third of the world's oil, meets on December 4 in Vienna to decide whether to adjust its output target.
Opec again lowered the forecast demand for its crude in the fourth quarter and 2014 in a monthly report last week, saying its production remained higher than next year’s demand for its oil despite a plunge in Iraqi and Libyan output.
If the United States and the European Union begin to ease their sanctions on Iran as talks progress over Tehran’s disputed nuclear programme, it is the Opec members, excluding Iraq, that will have to make way for increased output and exports of Iranian crude, Mr Al Shahristani said.
Iraq is highly dependent on high oil prices to sustain its US$117 billion budget, its highest on record, compared with $16.1bn in 2005. The bulk of the funds is deployed to pay salaries of public servants and subsidies. Despite a government-led move to diversify the economy, a lack of critical oversight and widespread corruption have been major impediments towards the success of these infrastructure projects and growth of the private sector.
While documents from the Iraqi government detailing mismanagement are unavailable, a final audit released by the Special Inspector General for Iraq Reconstruction revealed that the US had wasted at least US$8bn as a result of contract abuse and mismanagement from 2003 to 2012.
“The oil production plateaus have been reviewed since Iraq signed the bid rounds, and are now set for 3.78 million bpd by end of 2013 and 4.3 million bpd by the end of 2014,” said Luay Al Khateeb, executive director of the Iraq Energy Institute and London and an adviser to the parliament of Iraq.
“Over the next 15 months, Iraq is set to increase at least 1.3 million bpd over and above current production levels. Although a challenging milestone but not impossible to achieve.
“Based on the current political climate between Tehran and Washington, the tension over the Strait of Hormuz has become less hazardous than before. However, Iraq must not rely on the southern corridor, and should invest in diversifying its export outlets via Turkey and Jordan before the next conflict takes place in the region.”
Iraq also expects to sharply increase the amount of oil it sells to China next year, building its market share for this year even further, Falah Al Amiri, the director general of Iraq’s State Oil Marketing Organization, said yesterday.
“At the moment, China takes nearly 600,000 barrels per day but next year probably they will get 800,000 or 850,000 barrels a day,” said Mr Al Amiri.
Iraq overtook Iran this year to become China’s fifth-largest oil supplier.
* with agencies, and additional reporting by Hadeel Al Sayegh
Henrik Stenson's finishes at Abu Dhabi HSBC Championship:
2006 - 2
2007 - 8
2008 - 2
2009 - MC
2010 - 21
2011 - 42
2012 - MC
2013 - 23
2014 - MC
2015 - MC
2016 - 3
2017 - 8
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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 Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The%20specs%3A%202024%20Mercedes%20E200
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APPLE IPAD MINI (A17 PRO)
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Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4
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In the box: iPad mini, USB-C cable, 20W USB-C power adapter
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North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Movie: Saheb, Biwi aur Gangster 3
Producer: JAR Films
Director: Tigmanshu Dhulia
Cast: Sanjay Dutt, Jimmy Sheirgill, Mahie Gill, Chitrangda Singh, Kabir Bedi
Rating: 3 star
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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AT4 Ultimate, as tested
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