Abu Dhabi: Mubadala Petroleum and Petrochemicals, which is part of the newly created Mubadala Investment Company, is exploring new opportunities in upstream, midstream and downstream sectors to grow its business, its chief executive officer said on Wednesday.
Mubadala Investment Company was formed by merging Mubadala Development Company and the International Petroleum Investment Company, which owns corporate stakes in the energy industry and other sectors across the world earlier this year. Mubadala Petroleum and Petrochemicals is one of the main platforms of Mubadala Investment company, which has a portfolio valued at $41 billion (Dh150.6 billion), representing 32.7 per cent of the merged fund.
“We are just six months into our operational phase but we are already working on significant opportunities for creating value and delivering efficiencies by facilitating collaboration between our assets, sharing knowledge and engaging at a strategic level,” said Musabbeh Al Kaabi while speaking to media in Abu Dhabi.
In the exploration and production business, the company is working on two major projects in south-east Asia including the development of Ca Rong Do oil and gas field in Vietnam, which has an investment of $450 million, and Pagaga gas development project in Malaysia, which is expected to be sanctioned by the end of the year.
In the petrochemicals sector, the company has announced projects amounting to $5 to $6 billion, including two complementary projects that are expected to give a major position in the US Gulf coast petrochemical hub.
The first one is the acquisition of the Geismar olefins complex in Louisiana by Nova (wholly owned by Mubadala) with an investment of $2.1 billion in a plant producing 885,000 tonnes of ethylene per annum.
Another project is related to extending the Mubadala partnership with Total in a proposed joint venture involving Nova Chemicals and Borealis for an integrated project along the Gulf Coast of Texas.
The project incorporates the construction of a new of ethane steam cracker with a capacity of 1 million tonnes per year in Port Arthur, Texas; expanding Total’s existing 400,000 tonne-per-year polyethylene plant in Bayport, Texas; and building a new 625,000 tonnes per year of polyethylene plant utilising Borealis’s proprietary Borstar technology on the Bayport site, Texas.
“These projects take advantage of a growing demand for polyethylene, existing market position and proprietary technology and access to low-cost feedstock of US shale gas.”
In the refining business, the company’s portfolio comprises 1.4 million barrels per day of refining capacity spread across Europe and Asia.
The company produces 500,000 barrels of oil per day in its exploration and production operations with projects in the Middle East, south Asia and other countries.
Speaking on the merger of IPIC with Mubadala, he said the merger created a business of significant global scale focused on creating value and delivering returns to Abu Dhabi government, the main shareholder.
“For Abu Dhabi, it is about bringing new technologies to the country — particularly in petrochemicals — that will help diversify the economy and create new opportunities for Emiratis.”
The company is also in discussions with the Abu Dhabi National Oil Company (Adnoc) to expand the Borouge petrochemical plant in Ruwais.
Oil prices
On oil prices, he said inventories are started to balance due to commitment from Opec to cut production, as well as due to a reduction in activity in shale oil production and a lack of investment in the oil industry.
“It is going to impact the supply-demand equation going forward. Geopolitical factors too will weigh on oil prices.”
Oil prices surged past $60 past barrel in the last few days due to optimism that Opec will extend a production cut agreement up to the end of next year.
