Mubadala expects the global economy to rebound next year with a U-shaped recovery as growth rises to 5 per cent following a recession triggered by the Covid-19 pandemic, and it remains bullish on US shale bouncing back.
"Like another institution, we came up with three basic recoveries - V-shaped, U-shaped and L-shaped. With time we rolled out the V-shaped recovery," Musabbeh Al Kaabi, chief executive of the petroleum and petrochemicals division within Mubadala, said.
"Now we’re more focused, we think 70 per cent, there’s a probability that we’re experiencing a U-shaped type of global economic recovery and we think the global GDP [gross domestic product] will drop significantly this year but next year we hope that the global economy will recover to a growth of 5 per cent GDP globally,” he told the Atlantic Council in an online interview on Wednesday.
A U-shaped recovery refers to the economy returning to growth in a gradual manner following successive quarters of decline and a longer period in a recession than a V-shaped rebound.
Mubadala is a globally diversified fund with more than $229 billion (Dh840bn) in assets under management across 15 different sectors.
The petroleum and petrochemicals sector, which has been a savvy investor in petrochemicals, the US shale revolution and upstream assets manages a portfolio of $40bn. Mubadala has interests in companies such as Spain's Cepsa, Austrian chemicals player Borealis, Canada's Nova Chemicals as well as Russia's Gazprom Neft.
The probability of an L shaped recovery, characterised by rising unemployment and deep recession, followed by an economic rebound is 30 per cent, Mr Al Kaabi said.
"Back in 2019, when investment organisations like Mubadala ran their business plans, we envisaged a correction, and that correction probably was the worst case scenario," he said. "We saw a recession in the equity market of around 30 per cent but we have not envisaged a pandemic of this scale that we see currently.”
Mubadala Petroleum and Petrochemicals, an investor in the US shale revolution said the industry, which advanced during the 2014-16 price slump, is far from dead.
The company last year reached an agreement with US firm NextDecade Corporation to invest $50 million in the US company's upcoming Rio Grande liquefied natural gas facility.
The US oil industry has been battered by the price slump this year, which saw prices decline 80 per cent in April from their recent peaks in January. US crude futures also tumbled into negative territory last month, falling as low as -$40 per barrel constrained by limited storage capacity.
Several independent producers have shut-in production, while others have filed for bankruptcy amid the decimation of the US energy industry. Crude output in the US, the world's largest producer of oil and gas, will average 11.7 million barrels per day in 2020, according to the US Energy Information Administration.
Output is estimated to further decline by 800,000 bpd in 2021, which would mark the first annual decline since 2016.
"You cannot ignore the Permian in the US, the Permian will be developed and will be produced, the technology will improve and will unlock additional resources,” Mr Al Kaabi said.
"The current oil prices may not be helping but what it will do is slow the growth of the shale production but not completely kill it," he added. "We believe that the world needs unconventional, needs conventional and we see a world where both of these resources will play a role going forward to meet the growing demand”.
The Permian will continue to produce if prices average $35, $40 or $45 per barrel "but not on the same scale and growth” seen over the last two to three years.
Mubadala anticipates peak oil around 2030 and is preparing for a future where its businesses are resilient to weather that environment.
The company is currently reviewing its portfolio of projects, prioritising "critical" schemes over "optional" ones. Its large gas development project in Malaysia remains on track, Mr Al Kaabi said.
There is no slowdown in the petrochemical schemes operated by Nova Chemicals. Renewable energy projects in Abu Dhabi are also gathering momentum, he added, citing a 2 gigawatt project that received the world’s lowest tariff last month.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Profile
Co-founders of the company: Vilhelm Hedberg and Ravi Bhusari
Launch year: In 2016 ekar launched and signed an agreement with Etihad Airways in Abu Dhabi. In January 2017 ekar launched in Dubai in a partnership with the RTA.
Number of employees: Over 50
Financing stage: Series B currently being finalised
Investors: Series A - Audacia Capital
Sector of operation: Transport
About Seez
Company name/date started: Seez, set up in September 2015 and the app was released in August 2017
Founder/CEO name(s): Tarek Kabrit, co-founder and chief executive, and Andrew Kabrit, co-founder and chief operating officer
Based in: Dubai, with operations also in Kuwait, Saudi Arabia and Lebanon
Sector: Search engine for car buying, selling and leasing
Size: (employees/revenue): 11; undisclosed
Stage of funding: $1.8 million in seed funding; followed by another $1.5m bridge round - in the process of closing Series A
Investors: Wamda Capital, B&Y and Phoenician Funds
Adele: The Stories Behind The Songs
Caroline Sullivan
Carlton Books
COMPANY PROFILE
Name: Mamo Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua Based: Dubai, UAE Number of employees: 28 Sector: Financial services Investment: $9.5m Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors. More from Neighbourhood Watch
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
UAE currency: the story behind the money in your pockets
Muguruza's singles career in stats
WTA titles 3
Prize money US$11,128,219 (Dh40,873,133.82)
Wins / losses 293 / 149
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.
Last 10 winners of African Footballer of the Year
2006: Didier Drogba (Chelsea and Ivory Coast)
2007: Frederic Kanoute (Sevilla and Mali)
2008: Emmanuel Adebayor (Arsenal and Togo)
2009: Didier Drogba (Chelsea and Ivory Coast)
2010: Samuel Eto’o (Inter Milan and Cameroon)
2011: Yaya Toure (Manchester City and Ivory Coast)
2012: Yaya Toure (Manchester City and Ivory Coast)
2013: Yaya Toure (Manchester City and Ivory Coast)
2014: Yaya Toure (Manchester City and Ivory Coast)
2015: Pierre-Emerick Aubameyang (Borussia Dortmund and Gabon)
2016: Riyad Mahrez (Leicester City and Algeria)
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
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.
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The specs: 2018 Alfa Romeo Stelvio
Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km
COMPANY%20PROFILE
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My Cat Yugoslavia by Pajtim Statovci
Pushkin Press
About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
Sector: Technology/Social media
Funding to date: Estimated $300,000 from Hub71 in-kind support
MATCH INFO
Uefa Champions League semi-final, second leg
Real Madrid (2) v Bayern Munich (1)
Where: Santiago Bernabeu, Madrid
When: 10.45pm, Tuesday
Watch Live: beIN Sports HD
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
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Six large-scale objects on show
- Concrete wall and windows from the now demolished Robin Hood Gardens housing estate in Poplar
- The 17th Century Agra Colonnade, from the bathhouse of the fort of Agra in India
- A stagecloth for The Ballet Russes that is 10m high – the largest Picasso in the world
- Frank Lloyd Wright’s 1930s Kaufmann Office
- A full-scale Frankfurt Kitchen designed by Margarete Schütte-Lihotzky, which transformed kitchen design in the 20th century
- Torrijos Palace dome
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Company Profile
Name: JustClean
Based: Kuwait with offices in other GCC countries
Launch year: 2016
Number of employees: 130
Sector: online laundry service
Funding: $12.9m from Kuwait-based Faith Capital Holding
UAE currency: the story behind the money in your pockets
COMPANY%20PROFILE
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Killing of Qassem Suleimani
