Abu Dhabi woos UK companies
The Arab emirate plans to invest more than $100 billion to diversify away from oil and gas, reports Tracey Boles
AT Buckingham Palace last week, the Duke of York hosted a lavish dinner for the biggest trade delegation ever to visit Britain from Abu Dhabi, the largest and richest of the seven city states that make up the United Arab Emirates (UAE).
Among the Abu Dhabi delegates eating trout terrine and roast lamb with the top brass of British industry was Khaldoon Khalifa Al Mubarak, a man who has enjoyed a swift rise through the emirate’s political and business circles.
Al Mubarak, in his early thirties, is a member of the Abu Dhabi executive council and chief executive of Mubadala Development Company, a government-backed investment vehicle that uses foreign direct investment to establish new businesses in Abu Dhabi and acquires stakes in foreign firms.
Last year, for example, Mubadala bought a 5% stake in Ferrari, which is helping to develop a Ferrari theme park in Abu Dhabi.
Mubadala is at the forefront of an investment drive by Abu Dhabi’s crown prince Sheikh Mohammed. The ambition is to invest more than $100 billion in the emirate over the next seven years to diversify away from oil and gas, and create jobs for the fast-growing and educated 1.5m population.
Last week’s delegation, which included the chief executives of the Abu Dhabi national oil company ADNOC and the emirate’s airline, Etihad Airways, had come to woo British investors. The UAE is a former British protectorate and already Britain’s ninth-largest international trade customer, with exports totalling £5.5 billion last year.
The UAE was formed in 1971 from seven emirates. The most prominent are Dubai and Abu Dhabi. The latter controls 95% of the UAE’s hydrocarbon reserves, or 9% of the world’s proven oil and 3.5% of its gas.
Despite its rich reserves and the fact it occupies 87% of the UAE’s territory, Abu Dhabi has been outshone by Dubai, which is constructing a series of record-breaking developments at home and has pursued trophy assets abroad, notably P&O, the ports and ferries group.
After the death in 2004 of Abu Dhabi’s ruler Sheikh Zayed bin Sultan Al Nahyan, the new, younger leadership decided to invest the emirate’s multi-billion-dollar oil surplus at home and abroad.
Mubadala, set up in 2002, is one of the emirate’s main investment vehicles. It is advising on a $10 billion expansion of the international airport and a new $8 billion port.
Earlier this year, it joined forces with Dubai Aluminium to invest $6 billion in the world’s largest aluminium smelter. It owns 7% of Aldar Properties, an Abu Dhabi company that will oversee $30 billion of property development.
Al Mubarak said: “The next five to eight years will be a very exciting time. I think it is like the early days of Singapore.”
According to Al Mubarak, a template for future projects will be Dolphin Energy, a $4.5 billion joint venture between Mubadala, France’s Total and America’s Occidental to extract gas in Qatar and transport it by pipeline to the UAE. Mubadala has a 51% stake in the project, which is under construction.
Al Mubarak is also on the lookout for acquisitions in Britain, particularly among financial-services firms, healthcare providers and property developers.
Kingsmill Bond, Deutsche Bank’s head of emerging-market strategy, said: “Abu Dhabi is an attractive, long-term story because of the oil price and the domestic reforms being pushed through. These days, there is better openness and use of money in the emirate.”
In 2003, the value of British investment in the UAE stood at £736m. That is set to rise. Rolls-Royce and Shell have already signed memorandums of understanding with Mubadala, and other British companies could follow suit.
AT Buckingham Palace last week, the Duke of York hosted a lavish dinner for the biggest trade delegation ever to visit Britain from Abu Dhabi, the largest and richest of the seven city states that make up the United Arab Emirates (UAE).
Among the Abu Dhabi delegates eating trout terrine and roast lamb with the top brass of British industry was Khaldoon Khalifa Al Mubarak, a man who has enjoyed a swift rise through the emirate’s political and business circles.
Al Mubarak, in his early thirties, is a member of the Abu Dhabi executive council and chief executive of Mubadala Development Company, a government-backed investment vehicle that uses foreign direct investment to establish new businesses in Abu Dhabi and acquires stakes in foreign firms.
Last year, for example, Mubadala bought a 5% stake in Ferrari, which is helping to develop a Ferrari theme park in Abu Dhabi.
Mubadala is at the forefront of an investment drive by Abu Dhabi’s crown prince Sheikh Mohammed. The ambition is to invest more than $100 billion in the emirate over the next seven years to diversify away from oil and gas, and create jobs for the fast-growing and educated 1.5m population.
Last week’s delegation, which included the chief executives of the Abu Dhabi national oil company ADNOC and the emirate’s airline, Etihad Airways, had come to woo British investors. The UAE is a former British protectorate and already Britain’s ninth-largest international trade customer, with exports totalling £5.5 billion last year.
The UAE was formed in 1971 from seven emirates. The most prominent are Dubai and Abu Dhabi. The latter controls 95% of the UAE’s hydrocarbon reserves, or 9% of the world’s proven oil and 3.5% of its gas.
Despite its rich reserves and the fact it occupies 87% of the UAE’s territory, Abu Dhabi has been outshone by Dubai, which is constructing a series of record-breaking developments at home and has pursued trophy assets abroad, notably P&O, the ports and ferries group.
After the death in 2004 of Abu Dhabi’s ruler Sheikh Zayed bin Sultan Al Nahyan, the new, younger leadership decided to invest the emirate’s multi-billion-dollar oil surplus at home and abroad.
Mubadala, set up in 2002, is one of the emirate’s main investment vehicles. It is advising on a $10 billion expansion of the international airport and a new $8 billion port.
Earlier this year, it joined forces with Dubai Aluminium to invest $6 billion in the world’s largest aluminium smelter. It owns 7% of Aldar Properties, an Abu Dhabi company that will oversee $30 billion of property development.
Al Mubarak said: “The next five to eight years will be a very exciting time. I think it is like the early days of Singapore.”
According to Al Mubarak, a template for future projects will be Dolphin Energy, a $4.5 billion joint venture between Mubadala, France’s Total and America’s Occidental to extract gas in Qatar and transport it by pipeline to the UAE. Mubadala has a 51% stake in the project, which is under construction.
Al Mubarak is also on the lookout for acquisitions in Britain, particularly among financial-services firms, healthcare providers and property developers.
Kingsmill Bond, Deutsche Bank’s head of emerging-market strategy, said: “Abu Dhabi is an attractive, long-term story because of the oil price and the domestic reforms being pushed through. These days, there is better openness and use of money in the emirate.”
In 2003, the value of British investment in the UAE stood at £736m. That is set to rise. Rolls-Royce and Shell have already signed memorandums of understanding with Mubadala, and other British companies could follow suit.
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