Dubai: Falling oil prices will not affect projects at Mubadala Development Company — the Abu Dhabi-based investment firm — next year.
“I’m not expecting any delays or cancellations of any projects for Mubadala,” Homaid Al Shemmari, chief executive of Mubadala Aerospace and Engineering Services, told Gulf News at the UAE Economic Outlook Forum in Dubai on Wednesday.
A day earlier, an official from the Abu Dhabi Department of Economic Development told an audience at the same forum the emirate overestimated the price of oil for the current budget at $103 a barrel for 2014.
Brent crude, an international benchmark, has averaged at $102.35 a barrel for the first eleven months of the year, according to data from the United States Energy Information Administration (EIA). The average monthly price for December is likely to bring down the 2014 average.
Al Shemmari, who also serves on Mubadala’s investment committee that develops the fund’s investment policies, said non-oil divisions are likely to generate more cash next year. Mubadala has one directly linked oil division, Mubadala Petroleum.
Brent crude has collapsed by almost 50 per cent since June. Weaker demand by Europe and China and increasing production of shale in the United States has led to a global glut. On Wednesday, Brent was trading down 0.90 per cent to $59.47, a price below most Gulf government’s break even margins.
Asked how the drop in oil prices could impact Mubadala access to government funding in 2015, Al Shemmari said, “From our perspective, more and more we are actually moving away from that government dependency.”
Boeing, Airbus contracts
Mubadala Aerospace is still in discussions to lock down details of contracts with Boeing and Airbus that were signed in November 2013.
“We’re still working with the partners to come up with the business cases. I’m hoping by the end of June next year we will be able to finalise,” Al Shemmari said.
Strata already manufacturers some parts for the European and American aeroplane manufacturers.
