A divided UN Security Council on June 9, 2010, imposed a fourth round of financial and commercial sanctions on Iran.
Resolution 1929 reinforces a range of economic, high-technology and military sanctions against Iran, and imposes an asset freeze and travel ban on the head of the Iranian Atomic Energy Agency, Javad Rahiqi, and 40 entities linked to the nation's military elite. The sanctions also target 15 companies linked to the powerful Islamic Revolutionary Guard Corps, including the Khatam al-Anbiya Construction Headquarters, which was involved in the construction of the secret Qom facility. Sanctions are also imposed on 22 firms, including the First East Export Bank, involved in Iran's nuclear and ballistic weapons program, and on three entities controlled by the Islamic Republic of Iran Shipping Lines, which is accused of transporting illicit military goods to Iran.
The 15-nation Council adopted Resolution 1929 by vote of 12 in favour to 2 against and 1 abstention. Brazil and Turkey voted against citing concerns that key sponsors of the Resolution did not exhaust diplomatic efforts to resolve the nuclear standoff with Tehran, while Lebanon abstained.
In voting against the resolution, Turkey and Brazil said that they shared US concerns about Iran's nuclear program but they would vote against the text because it ran contrary to their efforts to bring about a negotiated solution through the Tehran Declaration of May 17, 2010, which provided a new opportunity for diplomacy. In fact, Turkey and Brazil supported that they had negotiated constructively with Iran, reaching a nuclear fuel agreement they believed could serve as a basis for a more comprehensive dialogue with the 5+1 Powers.
Specifically, Brazil opposed the resolution on the basis that it would delay rather than accelerate progress, and maintained that the adoption of sanctions by the Council was like following one of two tracks to solving the question, and in its opinion, the choice was made on the wrong track.
Turkey, for its part, supported that it sees no viable alternative to diplomacy and supported that the Tehran Declaration, signed between Turkey, Brazil and Iran, which aimed to provide nuclear fuel to the Tehran Nuclear Research Reactor, has created “a new reality” with respect to Iran’s nuclear programme since it was designed as a confidence-building measure, which, if implemented, would contribute to the resolution of thorny issues related to the nuclear programme.
Lebanon maintained that Iran has right to the peaceful use of nuclear energy and an obligation to adhere to the safeguards regime, and supported that the fuel swap deal Tehran negotiated with Brazil and Turkey provided the framework to resolve the problems emanating from Iran’s nuclear program. The sanctions regime, on the other hand, represented the absolute failure of diplomatic efforts.
After the vote, the UN five major powers of the Council issued a joint statement calling on Iran to restart talks on its nuclear program. The US, Britain, France, China and Russia - plus Germany called their strategy a combination of diplomacy and pressure, aimed at convincing Iran that it is heading in the wrong direction. They also pledged to engage Iran in talks on a deal to swap Iranian low-enriched uranium for a supply of more purified form of uranium to be used for a medical research reactor in Tehran.
It is noteworthy that the US administration succeeded in securing support for sanctions from the Council's permanent members, including China and Russia. Ever since Iran’s controversial nuclear program became public, Russia and China as permanent members of the Security Council have played a critical role on this issue. Iran has over the past years exerted its utmost efforts to evade from sanctions and benefit from Russian and Chinese leverage. Despite a number of lucrative deals offered by Iran to Russia and China, thus far American influence has proved to be prevailing in the diplomatic game. In other words, Iran did not manage to divide the 5+1 Powers and gain the support of both Russia and China in its nuclear program.
The immediate remarks by US President Obama on Resolution 1929 as released by the White House on June 9, 2010, focused on that “these sanctions show the united view of the international community that a nuclear arms race in the Middle East is in nobody’s interest, and that nations must be held accountable for challenging the global non-proliferation regime. The Iranian government must understand that true security will not come through the pursuit of nuclear weapons. True security will come through adherence to International Law and the demonstration of its peaceful intent.” And concluded, “We recognize Iran’s rights. But with those rights come responsibilities. And time and again, the Iranian government has failed to meet those responsibilities. Iran concealed a nuclear enrichment facility in Qom that raised serious questions about the nature of its program”.
Iran's official reaction to the UN Security Council Resolution 1929 as issued by its Supreme National Security Council (SNSC) on June 18, 2010, was that the Islamic Republic has the right to develop nuclear energy for peaceful purposes, while special reference was made on the last report by the Director General of the IAEA, published only a day before the Resolution, which reiterated for the 22nd time that Iran’s activities have not diverted from their peaceful objectives.
Additionally, the Iranian parliament, in response to the new UN sanctions Resolution, voted overwhelmingly on June 16, 2010 to study a bill that if approved would allow a reciprocal inspection of foreign ships and also bar inspection of the Iranian nuclear sites beyond the NPT requirements. Of the 197 MPs present in the parliament, 180 voted to study the proposed bill, 4 voted against, and 4 abstained. Since Resolution 1929 allows inspection of Iranian ships, Iran appears ready to exert reciprocal inspection of foreign ships in the Strait of Hormuz if any Iranian ship is inspected.
Also, Iran has publicly welcomed US companies to invest in the country’s economic projects with no limitations. At the same time, Tehran expressed its satisfaction over the recent position taken by the US National Foreign Trade Council rebuffing economic sanctions against the Islamic Republic, while at the same time Iran announced its aim to establish a joint trade committee with three North American countries in a bid to create an opportunity to exchange information between Iranian firms and companies in the three North American states, as confirmed by the chairman of the Iran Chamber of Commerce, Industry and Mine, Mohammad Nahavandian.
At the same time, Iran appears determined to review its cooperation with Russia within a long-term framework, as reaction to the position adopted by Russia in the UN Security Council vote and to the Russian delay for the delivery of the S-300 anti-missile system. Reports leaked from the French capital disclose that Russian Prime Minister Vladimir Putin, during talks with French President Nicolas Sarkozy on June 11, 2010, stated that Russia decided to "freeze the delivery of the S-300 missiles". According to the Iranian position, Russia is in flagrant breach of its contractual obligations towards Iran since Moscow has so far abstained to deliver the system on the promised date while it has been prepaid for the deal. The S-300 system, is a vital air defence project for Iran as it can track targets and fire at aircraft 120 kilometers (75 miles) away, feature high jamming immunity, and it is capable to simultaneously engage up to 100 targets.
On a final flashpoint background note as related to Iran’s nuclear program, it is important to stress that it was the administration of President Gerald Ford in the 1970s that convinced Iran to pursue nuclear energy as sustainable alternative to hydrocarbon based production. Before the Iranian Revolution of 1979, Iran did actually receive US assistance under the Atoms for Peace program to build a nuclear research reactor in Tehran (TRR). For more than 30 years the TRR has produced medical isotopes for the treatment of some 800.000 cancer patients. That research reactor is now running out of fuel.
During the early 2000s, in a gesture of goodwill, Iran’s reformist government at that time temporarily suspended its entire nuclear enrichment program and, in December 2003, signed and implemented the IAEA Additional Protocol that provides for more intrusive inspections than those required under the NPT. However, Iran resumed its enrichment program and dropped its Additional Protocol cooperation.
In the Fall of 2009, the US proposed that Iran swap, in a third country, 1.200 kilograms (2.646 pounds) of its low-enriched uranium (LED) for the higher-enriched uranium needed to fuel the TRR. Iran accepted this offer, in principle, but demanded guarantees to ensure it would actually receive the needed fuel. On May 17, 2010, Turkey, Brazil and Iran signed a third-country swap agreement that was the same deal earlier offered by the US, except for a clause that provided for the return of Iran’s LED in the event the enriched fuel was not delivered within a year.
Note: Resolution 1929 imposes restrictions on Iran’s nuclear activities, its ballistic missile program, and for the first time, its conventional military, It creates a new framework to crack down Iranian banks and financial transactions. It targets entities, individuals and institutions including those associated with the Revolutionary Guard. Resolution 1929 aims to present the most comprehensive sanctions faced by Iran.
Following are excerpts of Resolution 1929 (2010).
The Security Council,
Notingwith serious concern that Iran has constructed an enrichment facility at Qom in breach of its obligations to suspend all enrichment-related activities, ……and noting that Iran has enriched uranium to 20 per cent, and did so without notifying the IAEA with sufficient time for it to adjust the existing safeguards procedures,
Emphasizing the importance of political and diplomatic efforts to find a negotiated solution guaranteeing that Iran’s nuclear programme is exclusively for peaceful purposes and noting in this regard the efforts of Turkey and Brazil towards an agreement with Iran on the Tehran Research Reactor that could serve as a confidence-building measure,
Reaffirms that, in accordance with Iran’s obligations under previous resolutions to suspend all reprocessing, heavy water-related and enrichment-related activities, Iran shall not begin construction on any new uranium-enrichment, reprocessing, or heavy water-related facility and shall discontinue any ongoing construction of any uranium-enrichment, reprocessing, or heavy water-related facility; (Article 6)
Decides that all States shall prevent the direct or indirect supply, sale or transfer to Iran, from or through their territories or by their nationals or individuals subject to their jurisdiction, or using their flag vessels or aircraft, and whether or not originating in their territories, of any battle tanks, armoured combat vehicles, large calibre artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems as defined for the purpose of the United Nations Register of Conventional Arms, or related materiel, including spare parts, or items as determined by the Security Council or the Committee established pursuant to resolution 1737 (2006) (“the Committee”), decides further that all States shall prevent the provision to Iran by their nationals or from or through their territories of technical training, financial resources or services, advice, other services or assistance related to the supply, sale, transfer, provision, manufacture, maintenance or use of such arms and related materiel, and, in this context, calls upon all States to exercise vigilance and restraint over the supply, sale, transfer, provision, manufacture and use of all other arms and related materiel; (Article 8)
Decides that the measures specified in paragraphs 12, 13, 14 and 15 of resolution 1737 (2006) shall apply also to the individuals and entities listed in Annex I of this resolution and to any individuals or entities acting on their behalf or at their direction, and to entities owned or controlled by them, including through illicit means, and to any individuals and entities determined by the Council or the Committee to have assisted designated individuals or entities in evading sanctions of, or in violating the provisions of, resolutions 1737 (2006), 1747 (2007), 1803 (2008) or this resolution; (Article 11)
Notes that States, consistent with international law, in particular the law of the sea, may request inspections of vessels on the high seas with the consent of the flag State, and calls upon all States to cooperate in such inspections if there is information that provides reasonable grounds to believe the vessel is carrying items the supply, sale, transfer, or export of which is prohibited by paragraphs 3, 4 or 7 of resolution 1737 (2006), paragraph 5 of resolution 1747 (2007), paragraph 8 of resolution 1803 (2008) or paragraphs 8 or 9 of this resolution, for the purpose of ensuring strict implementation of those provisions; (article 15)
Calls upon States to take appropriate measures that prohibit in their territories the opening of new branches, subsidiaries, or representative offices of Iranian banks, and also that prohibit Iranian banks from establishing new joint ventures, taking an ownership interest in or establishing or maintaining correspondent relationships with banks in their jurisdiction to prevent the provision of financial services if they have information that provides reasonable grounds to believe that these activities could contribute to Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems;
Calls upon States to take appropriate measures that prohibit financial institutions within their territories or under their jurisdiction from opening representative offices or subsidiaries or banking accounts in Iran if they have information that provides reasonable grounds to believe that such financial services could contribute to Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems;
Commends the Director General of the IAEA for his 21 October 2009 proposal of a draft Agreement between the IAEA and the Governments of the Republic of France, the Islamic Republic of Iran and the Russian Federation for Assistance in Securing Nuclear Fuel for a Research Reactor in Iran for the Supply of Nuclear Fuel to the Tehran Research Reactor, regrets that Iran has not responded constructively to the 21 October 2009 proposal, and encourages the IAEA to continue exploring such measures to build confidence consistent with and in furtherance of the Council’s resolutions;
1. The Free Gaza movement says it intended to deliver aid to Gaza to get around the Israeli blockade and to pressure the international community to review its sanctions policy and end its support for continued Israeli occupation. Do you agree with this public statement and what do you believe was the aim of the Gaza-bound flotilla?
At first, let's remind the true facts. On September 9th, 2005, Israel evacuated its last soldier from Gaza Strip. Not a shred of Israeli presence was left there. 8.000 Israeli settlers were evacuated as well. From this day and on, the Palestinians could turn Gaza to a Mediterranean Dubai. To bring investors, to start development projects, the entire world was ready to help. Instead, Hamas, the Palestinian version of Taliban, turned Gaza, with the massive help of Iran, to a base of terrorism, launching rockets and missiles to Israeli civilian towns and villages. In mid-June 2007, Hamas took full control of Gaza through a brutal coup-detat, slaughtering Abu-Mazen's supporters and enforcing the extremist version of Islam. Yes, Gaza should be freed, from Hamas brutal, medieval regime.
2. Why did Israel want to stop the flotilla and what is the view of Israel for the Free Gaza Movement, an umbrella organisation of groups like the Turkish IHH?
They don’t want to free Gaza. They want to support the military regime of Hamas in Gaza. To allow the flotilla, means to allow naval route of supply to the terrorist base of Hamas and Iran.
3. What is the objective of the Israeli blockade on Gaza imposed in 2007 and what has been its impact until today?
The Hamas take over in June 2007 created a new situation. Till then, 750 trucks used to cross the border with Israel daily. In that time, I was the Deputy Minister of Defense and I was in charge of it. But when you have terrorists on the other side of the border, it is impossible to maintain cross-border movements as it was before. Recently, the Government of Israel, allowed most goods to be imported to Gaza, but the security conditions do not allow trade as it used to be. I support the idea of handing the control over check-points to Fayyad's government but Hamas will not allow it to happen.
4. There is mounting criticism that Israel breached international standards and human rights law through its use of armed force. There are even questions being raised about the violation of international maritime law by Israel. Can you comment on that, and according to your view was the Israeli action legal?
No other democratic nation could act differently. Do you imagine what the Turks would do if a flotilla was moving to support the PKK?
5. Do you believe that the recent Gaza-bound flotilla has become a precedent that may inspire other countries and/or organisations to adopt similar efforts in the name of Gaza?
There are a lot of organizations which sympathize with Hamas. Part of them out of solidarity with the extreme Islamist movement, like IHH. Part of them because they think that to hate Israel is the current bon-ton of some ultra-liberal circles and anarchists in Europe. So it will continue. Not only organizations. States like Libya and Iran may send their provocative flotillas.
6. What are the likely political repercussions and the lessons learnt from the recent events?
I can tell you what the lesson is for us, the Israelis: to be better prepared. To act in a more sophisticated way. Not to enter to traps.
7. Let’s come to the recent situation between Turkey and Israel. How much do you think will the recent tension affect the strategic nature of the Israeli-Turkish relationship? And what is your view of the new Turkish foreign policy as promoted by Foreign Minister Ahmet Davutoglu, particularly in regards to Turkish-Israeli relations?
I strongly believe that two regional strong democracies – Israel and Turkey, should be in good relations. Once we used to be strategic allies. Once I toyed with the idea of an alliance of the three big democracies of the East-Mediterranean: Greece, Turkey and Israel. We share some basic interests. To remind you, till 2008 we accepted Turkey as an honest broker between us and Syria. But I am afraid now that the new Turkish policy went too far. I told my Turkish colleagues: "I have no problems about your new policy. But there is one red-line that you can't cross - taking side with the mortal enemies of Israel - Iran and Hamas".
The Turkish flotilla and Turkey’s vote against Iran sanctions in the UN Security Council – all this means that Turkey takes side. Beside the damage to our bilateral relations which I cherish very much, if Turkey sides with the fanatic Islam, it can't pursue the constructive regional role that it wants to play.
* General (R.) Dr. Ephraim Sneh is Chairman of the S. Daniel Abraham Center for Strategic Dialogue at Netanya Academic College and President of the Silver Bullet Ltd. He was Member of the Knesset (Israeli Parliament) in 1992-2008, and Chairman of the Knesset sub-committee on Defense Planning and Policy in 2003-2006. He also served twice as Deputy Minister of Defense in 2006-2007 and in 1999-2001, Minister of Transportation in 2001-2002, and Minister of Health in 1994-1996. General (R.) Dr. Ephraim Sneh led the first secret negotiations between Israel and the PLO in 1988-1989. He is the author of two books "Responsibility" [1996], and "Navigating Perilous Waters": Israel Strategy for Peace and Security [2002].
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"Lift the Siege on Gaza as soon as Possible"
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INTERVIEW WITH Ambassador Marwan Abdelhamid
Conducted by Antonia Dimou
1. Critics have accused Free Gaza movement of deliberately provoking a confrontation with Israel and argued that the attempt to break the siege was political and not just a humanitarian relief operation. Do you agree with this view and what do you believe was the aim of the Gaza-bound flotilla?
Israel attacked the Freedom flotilla in international waters, killing nine Turkish nationals, in a process of piracy in the daytime; it has proved that the fleet was carrying humanitarian aid to the three-year besieged people of Gaza.
Against Israeli allegations, as known to the whole world, there was no weapon on the ships. Instead, one Israeli soldier was killed, nine Turks were killed, and more than forty passengers of these ships were wounded. The whole world no longer accepts the Israeli siege imposed on over a million and half Palestinians in the Gaza Strip.
2. In the days after the flotilla event and in response to critics, Israel has claimed that it has the legal argument to enforce a naval blockade on Gaza in accordance with the Gaza-Jericho agreement of May 1994. Under the agreement between the PNA and Israel, the latter reserves the right to patrol 20 nautical miles of those waters "without limitations" and to take "any measures necessary against vessels suspected of being used for terrorist activities... or for any other illegal activity". Can you comment on that?
Was a fleet of freedom to help the people of Gaza, a terrorist act?! Note that the crime of piracy took place in international waters, what is the relationship of this aggression, with the Oslo agreements?! Were the Representatives and the citizens of Europe, America and the world terrorists?! Was the cargo of the Freedom flotilla loaded with weapons and explosives, or with foodstuff and medical supplies to prevent Israel's blockade on the people of Gaza?
3. Following Israel's unilateral disengagement from Gaza in August 2005, the Israeli Supreme Court ruled that the territory was no longer occupied. However, since September 2007, Israel has declared Hamas-ruled Gaza a "hostile entity" and blockaded the Strip. What has been the objective of the Israeli blockade on Gaza and what has been its real impact up-today?
Israel imposed a blockade on Gaza since the signing of the Oslo agreements in 1994, and a separation between Gaza and the West bank, because Tel Aviv does not long for the establishment of an independent Palestine state in the West Bank, Gaza and Jerusalem., Note that the Oslo agreements provide for the geographical unity and for unity in all political and legal aspects of these areas. The world must know that Israel is preventing Gaza students from studying at universities in the West Bank, and patients from receiving medical treatment at hospitals in the West Bank. Israel also discourages the economic unity and prevents the movement of goods and people between the West Bank and Gaza. The announcement by Israel of Gaza as hostile entity after the Hamas takeover was in fact in line with the Israeli policies since Oslo.
4. In a recent interview with an Egyptian television channel, Palestinian Authority President Mahmoud Abbas said that the state of the Palestinian cause was like that of a hijacked airplane and added that the decision on the Palestinian reconciliation was in Iran's hands, because Hamas obeyed Iran, and thus was thwarting the reconciliation. Do you believe that the recent Gaza-bound flotilla has become a precedent that may inspire other countries and/or organisations to adopt similar efforts exploiting the “Gaza card”?
There is regional interference, this is no secret, in the Palestinian internal affairs. It's not just Iran alone; there are Arab countries which prevent the restoration of Palestinian unity. Liberty Fleet had a pure humanitarian goal, and not the goal of recruitment in Gaza. Intensifying international pressure on Israel to lift the unjust siege on our people in the Gaza Strip is urgent, whether by sending ships or in any other way. The lift of the siege on Gaza must happen as soon as possible.
5. The Palestinian camp seems to be deeply divided. How can reconciliation be possible between the secular outlook of Fatah movement and the Islamist worldview of Hamas? Could Marwan Barghuti, the leading figure of the second Intifada who is imprisoned in Israel, bring about reconciliation between Fatah and Hamas?
These political forces are all for one people. The democratic choice of people and the principle of evolution to power are the foundations for the protection of the internal unity of the Palestinians. Suspension of external interference in Palestinian affairs is urgent.
6. Israeli Premier’s predecessor Ehud Olmert made an offer, the establishment of a Palestinian state on far more than 90 percent of the West Bank, a division of Jerusalem and the return of a few thousand refugees to Israel. Was this offer genuine and can such an offer serve as a genuine basis for the creation of a viable and sovereign Palestinian state?
We have heard in the media this proposal by Olmert. But the Palestinian people insist that Israel withdraws from all occupied lands of 1967, implements the resolutions of International Law including resolution 194, accepts the right of Palestinian refugees to return and ends settlement activity. As it is evident, there can be no peace under occupation and with the expansion of illegal settlements.
7. Before the flotilla intercept operation, Hamas seemed to be on the defensive domestically in the West Bank and Gaza and was blamed for prolonging the 3-year split with Fatah. In the day after the flotilla event, what do you believe is the standing of Hamas and what are the likely political repercussions and the lessons learnt?
We are not interested in determining the goals of Hamas, we are interested in lifting the siege that is imposed on our people in Gaza. This is the basis.
* Amb. Marwan Abdelhamid is member of the Central Council of the PLO, President of the General Union of Palestinian Engineers (GUPE), Vice President of the World Federation of Engineering Organization (WFEO). He was advisor to the Palestinian President Mahmoud Abbas and served as Ambassador of Palestine to Greece.
** SOURCE: SPECIAL EDITION OF MIDDLE EAST OBSERVER, Issue #3, Vol. 1, June-August 2010
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
Investment
Objective
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Asset
Allocation
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Create mandates
within an
asset
class or a
sub-asset
class
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Define the
benchmark
(S&P500
Index,
MSCI
Index)
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Create
Guidelines
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Execution
(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.
