UAE and German companies have signed energy and petrochemicals deals worth at least Dh4.6 billion (US$1.25bn) and proposed a new gasfield development during a two-day visit to Abu Dhabi by Angela Merkel, the German chancellor.
Mrs Merkel, who last visited the UAE in 2007, called for increased bilateral trade between the two countries in sectors including energy, chemicals, transport and tourism.
Germany is the UAE's fifth-largest trade partner and the largest from continental Europe.
"The UAE is the most important economic partner for us in the region," Mrs Merkel told a meeting of the UAE-Germany joint economic committee in the capital yesterday.
"We know we're not the only partner of the UAE, which requires of us greater and greater efforts," she said.
On Monday, the Abu Dhabi plastics maker Borouge finalised the awarding of a $1.07bn contract to the German engineering and industrial gases group Linde.
Linde will build an "ethane cracker" at Ruwais, the industrial complex on Abu Dhabi's coast, for converting up to 1.5 million tonnes a year of natural gas feedstock into ethene, a gas from which polythene plastics are made.
Borouge, a joint venture between Abu Dhabi National Oil Company (ADNOC) and the Vienna-based chemicals producer Borealis, is seeking to expand the annual capacity of its production site at Ruwais to 4 million tonnes of plastics by 2014 from 600,000 tonnes.
Separately yesterday, ADNOC and Wintershall, the biggest German oil and gas producer, signed a memorandum of understanding on "possible joint exploration and development" of an Abu Dhabi gas and condensate deposit.
"The joint declaration of intent is an important step on the path towards possible long-term co-operation opportunities in the energy sector between Germany and the emirate of Abu Dhabi," Wintershall said.
On the sidelines of yesterday's economic meeting, a senior manager of Wintershall said the gas deposit was not the Shah gasfield, for which ADNOC has been seeking a development partner after the US company ConocoPhillips quit the challenging $10bn sour-gas project last month.
The manager did not rule out the smaller Hail offshore gasfield, which ADNOC had previously said it planned to develop.
Wintershall opened an Abu Dhabi office two months ago. The company is offering to share advanced technology to boost oil and gas recovery from "complex reservoirs".
It is one of several European oil companies that are seeking to establish a foothold in Abu Dhabi as the concessions for most of the emirate's biggest oilfields approach expiry in 2014 and 2018.
The German industrial and engineering group Siemens said yesterday it had received a ?150 million (Dh675.1m) order from the operator of Abu Dhabi's power grid, the Government-owned Abu Dhabi Transmission and Despatch Company, for expansion of the emirate's electricity distribution network.
Germany's bilateral trade with the UAE peaked at $8.4bn in 2008, falling to $6.3bn last year because of the recession.
"By the next time I come here, I want this to have increased," Mrs Merkel said.
The German chancellor was at the start of a tour of Gulf states with her next scheduled stop being Saudi Arabia.
"The region is interesting for everything that concerns infrastructure, the energy sector and increasingly the chemical industry," Mrs Merkel said.
While in the capital, she also discussed the euro crisis and the controversy over Iran's nuclear programme.
"Gulf countries and in particular the UAE play an important role in the peace process in the Middle East and, of course, in relation to Iran," Mrs Merkel said.
Dr Bernd Pfaffenbach, the state secretary of the German ministry of economics and technology, said the stability of the euro was "essential".
The currency has fallen sharply in recent weeks amid concerns that EU efforts to contain the Greek debt crisis could drag Europe back into recession.
* additional reporting by Uta Harnischfeger
tcarlisle@thenational.ae
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
Race card
1.45pm: Maiden Dh75,000 1,200m.
2.15pm: Maiden Dh75,000 1,200m.
2.45pm: Handicap Dh95,000 1,200m.
3.15pm: Handicap Dh120,000 1,400m.
3.45pm: Handicap Dh80,000 1,400m.
4.15pm: Handicap Dh90,000 1,800m.
4.45pm: Handicap Dh80,000 1,950m.
The National selections:
1.45pm: Galaxy Road – So Hi Speed
2.15pm: Majestic Thunder – Daltrey
2.45pm: Call To War – Taamol
3.15pm: Eqtiraan - Bochart
3.45pm: Kidd Malibu – Initial
4.15pm: Arroway – Arch Gold
4.35pm: Compliance - Muqaatil
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
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 specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
