Sultan Al Jaber, UAE Minister of Industry and Advanced Technology; and Group CEO, Abu Dhabi National Oil Company (ADNOC): Viewpoint

Viewpoint: Sultan Al Jaber

Today’s challenging economic landscape has highlighted the attractiveness of the UAE’s safe, reliable and stable business environment. Completing large and complex transactions in a complicated economic and business environment like the one we are all experiencing only demonstrates the continued confidence of the global investment community in the UAE as an investment destination.

In this context, the $20.7bn gas pipeline deal announced in late June 2020 highlights the strength of the UAE’s energy assets, its robust infrastructure base, lack of risk and stable income-generating portfolio. It is the latest example of the UAE’s ability to attract top-tier investment institutions, despite the difficult economic climate.

No one today is in a position to know exactly when the post-Covid-19 recovery phase will happen and how the situation will unfold in the very near future. No one is able to predict the impact of a potential second wave of the virus. Having said that, there are encouraging signs of increased activity in Asia, Europe and North America. This is happening because of the process of economic reopening in certain countries across these regions. For example, we are already seeing some major economies exceed the crucial 50-point mark in the purchasing managers index for the first time since the outbreak of the pandemic. This points towards renewed economic expansion and is being reflected in the oil markets, which have recently begun to tighten.

Oil markets are now in a much healthier place compared to where they were at the beginning of the second quarter of 2020. The consensus in the industry is that there is reason for cautious optimism and positivity, and that the recent agreement by the Organisation of the Petroleum Exporting Countries Plus, together with more robust demand, is helping rebalance the market.

These dynamics are not foreign to us, and navigating times like these really comes down to resilience. That said, having to deal with a pandemic, coupled with an economic slowdown and record low oil prices, is not something we have dealt with before.

In this unprecedented environment, we are seeing the benefits of the forward-thinking guidance of our leadership in ensuring a holistic transformation at ADNOC. Today we are stronger and better positioned to manage the current market situation. We will continue to develop investment opportunities across the business value chain in order to make efficient use of capital and reinvest it in more profitable projects. We have also announced our intent to more proactively manage our assets. For example, together with a pool of long-term strategic partners, we are investing in downstream industries to establish one of the largest integrated refining and petrochemical complexes in the world in Ruwais. We are developing a plug-and-play manufacturing ecosystem that will support the UAE’s efforts to diversify the economy; nurture small and medium-sized enterprises; and generate sustainable, homegrown jobs.

Our aim is also to help stimulate the growth of other industrial sectors. There are numerous opportunities for international investors across multiple sectors, including energy, infrastructure, logistics and services. We are focused on creating a vibrant industrial and manufacturing centre, as well as developing our health care industry, technology and biotech sectors, and agriculture and food-production capabilities. We also have a significant position in the renewables and clean energy segment, which will complement our expertise in hydrocarbons.

In short, there is a differentiated value proposition provided by the UAE to international investors. The potential for high-quality investment opportunities, with attractive investment and risk-return profiles, is significant. Looking ahead, the country will continue to enhance and improve its diversifying and expanding sectors to make its economy stronger and more resilient to any external shocks.