(Photo from: http://gsec.abudhabi.ae)
By Antonia Dimou
Abu Dhabi and Dubai formed, after Britain’s departure from the Persian Gulf in 1971 and with respective ruling dynasties that hailed from the same Bani Yas bedouin tribe, the seven-member federation of the United Arab Emirates (UAE) in 1972. As one of the miracles of modern times, the once impoverished economy of Abu Dhabi has been transformed to a $70 billion colossus that happens to boast the third largest GDP in the Arab world after Saudi Arabia and Egypt in less than three decades under the inspired leadership of the late UAE President Sheikh Zayed bin Sultan Al Nahyan.
The late Shaikh Zayed not only used economics to promote the confederation concept and forge the UAE into a single economic unit by creating a new class of UAE technocrats but also showed no tolerance for commissions, payoffs or corruption at a time when oil economies were notorious for corruption and financial mismanagement. No wonder Transparency International has rated the UAE as the least corrupt nation in the Middle East.
GENERAL INFORMATION
The UAE occupies one tenth of the world’s proven oil reserves and 4 per cent of global natural gas deposits. Abu Dhabi owns the majority of these resources, 95 per cent of the oil and 92 per cent of gas. Abu Dhabi thus holds 9 per cent of the world’s proven oil reserves (98.2bn barrels) and almost 5 per cent of the world’s natural gas (5.8 trillion cu metres). Its petrodollar surplus has turned Abu Dhabi into one of the world’s leading institutional investors, an external creditor that dwarfs any other Middle East sovereign in the Euro markets.
Unlike Iraq and Kuwait, the UAE leadership refused to nationalise or expropriate Western oil concessions in Abu Dhabi. It created a unique partnership and joint venture model with Abu Dhabi National Oil Company (ADNOC) as the holding company owned 100 per cent by the government and initiated joint ventures with global energy giants such as Total, BP, Mobil, Chevron and others. This model gave Abu Dhabi sovereignty over its oil wealth yet enabled it to benefit from the Western oil companies’ technological and management resources.
ABU DHABI NATIONAL OIL COMPANY (ADNOC)
Abu Dhabi National Oil Company (ADNOC) was established in 1971, to operate in all areas of the oil and gas industry and since has steadily broadened its activity establishing companies and subsidiaries and creating an integrated oil and gas industry in Abu Dhabi. Today, the company manages and oversees oil production of more than 2.7 million barrels per day which ranks it among the top ten oil and gas companies in the world.
Over the past three decades, ADNOC has expanded its business activities, enhanced its competitive position and managed to become one of the world's leading oil companies with substantial business interests in upstream and downstream activities, including transportation, shipping, marketing and distribution.
ADNOC's efforts in the exploration and production field have concentrated on assessing undiscovered reserves and optimizing hydrocarbon recovery by improving the reservoir management.
ADNOC has 14 subsidiary companies working in the various fields of the oil, gas and petrochemical industry as well as crude oil and gas transport and services. They include ADCO, ADMA-OPCO, GASCO, ADGAS, ZADCO, TAKREER, NDC, ESNAAD, IRSHAD, FERTIL, BOROUGE, NGSCO-ADNATCO, and ADNOC- Distribution.
ADNOC’s products and services focus on:
(a) Upstream Operations; The process of exploration, development and production of the oil and gas.
(b) Energy to the Consumer; Fast-expanding network of over 170 filling stations in Abu Dhabi, Al Ain, the Western Area and Northern Emirates.
(c) Energy to the Business; ADNOC provides aviation re-fuelling services to over 50 airlines at regional airports.
(d) Downstream Operations; The process of refining crude oil into petroleum products to the distribution, marketing, and shipping of the products.
(e) Marketing and Refining; Seventy percent of the total annual production of ADNOC's refined products is exported.
(f) Energy and the UAE; ADNOC plays a major role in the ongoing growth of the economy of the Emirate of Abu Dhabi.
The widespread turmoil of the global financial system in 2008-2009 had almost no impact on ADNOC and it is estimated that if its remaining projects go according to plan, the company and its subsidiaries will award construction contracts on no fewer than three projects worth more than 10bn dollars each in 2010.
The state energy giant may award 40bn dollars worth of contracts inside a year, a huge achievement in logistical terms alone. The only setback to the programme of awards is the delay to a key component of one of the 10bn dollar-plus mega-projects. And that is the development of sour, or sulphur-rich, gas reserves from the southern Shah field.
ABU DHABI INVESTMENT AUTHORITY
Abu Dhabi plays a leading role in world economy. Its sovereign wealth fund, the Abu Dhabi Investment Authority (ADIA) currently estimated at 875 billion dollars, is the world’s wealthiest sovereign fund in terms of total asset value. The fund is controlled by the ruler of Abu Dhabi who confirmed that 35 to 50 per cent of ADIA's investments are in the United States. Europe accounts for 25 to 35 per cent of its portfolio, while the rest is spread between Asia and other emerging markets.
ADIA was established over 30 years ago and is a premier global institutional investor with the mission of securing and maintaining the current and future prosperity of Abu Dhabi. The Authority prudently invests Abu Dhabi’s assets through an investment strategy focused on long-term value creation.
It manages a substantial global diversified portfolio of holdings across sectors, geographies and asset classes including public listed equities, fixed income, real estate, and private equity, and it does not seek active management of the companies it invests in.
ADIA’s governance process is comprised of:
(a) Investment Management
| |
|
|
|
--- |
|
|
Define the
|
|
|
|
|
(b) Financial Control - The implementation of investment policy is governed by pre-audit, post-audit, financial control, performance and risk reporting, and compliance.
(c) Information Systems - ADIA’s information systems enable the investment management and financial control processes to operate effectively through the accurate capture of data to ensure compliance with internal guidelines and external regulations.
(d) Human Capital - ADIA's human resource strategy underpins the institution's governance by developing ADIA's world class talent through recruitment, performance management, compensation, and learning and development.
(e) Specialised Committees -
o Investment Committee
o Strategy Committee
o Guidelines Committee
o Management Committee
o I.T. Committee
o Compensation Committee
o Audit Committee
DUBAI–ABU DHABI RELATIONS AND THE POLICY OF DIVERSIFICATION
In the face of the looming economic crisis, it was revealed that Dubai’s economic miracle, which was mostly financed on borrowings, was an illusion. It looked like Dubai might go into a default on some of its debts and had to complete a 26 billion dollar restructuring with bondholders. Neighbour emirate Abu Dhabi steeped in providing billions in much-needed financing. Specifically, Abu Dhabi put 10 billion dollars into state-owned Dubai World, Dubai’s global investment programme, and its real estate arm. Dubai's property development firm, Nakheel, planned to use about 4 billion dollars of the capital to pay off bonds to help Dubai World restructure its debt. The move spurred stock market rallies around the world.
The global economic crisis has raised a series of questions. Since there are many similarities between the two emirates, Abu Dhabi, the capital of the UAE, has also been diversifying in recent years, investing substantially in industry, tourism, real estate and retail. So why has Abu Dhabi not been rocked as badly by the global recession as its neighbour?
The answer lies with oil, not only its resultant economic benefits but how the wealth has been invested. The Abu Dhabi Investment Authority (ADIA) has invested the country’s huge surpluses across a wide range of low risk investments over the years.
It is true, that the UAE government has taken on an active diversification and liberalisation programme to reduce the emirates’ reliance on the hydrocarbon sector.
Served by the inexorable rise in oil prices, the emirates’ non oil and gas GDP has outstripped that attributable to the energy sector. Remarkably, non oil and gas GDP now constitutes 64 per cent of the UAE’s total GDP. This trend is reflected in Abu Dhabi which set forth its own plans for creating a more diversified economy, both in its Policy Agenda 2008-2009 and its Strategic Plan 2008-2012. These two documents refer to diversifying into a “raft of new areas”. In addition to exporting raw materials in the from of oil and gas, Abu Dhabi is adding further value by increasing production on refined and semi-refined products.
Another area of growth that Abu Dhabi fosters is industrial diversification with the completion of an industrial free zone, the Industrial City of Abu Dhabi, and the construction of another, ICAD II, in the pipeline. Also, diversification is boosted through the promotion of tourism and real estate sectors with the Abu Dhabi Tourism Authority and the Tourism and Development Investment Company leading development projects.
1 comment:
ADNOC is the national oil company in Abu Dhabi and It also manage a large quantity of oil and distribution in Abu Dhabi and that why their Economy is much higher then Pakistan ....
Abu Dhabi Tourism
Post a Comment