Abu Dhabi’s IPIC Eyes More Energy Investments
Wealth fund aims to take advantage of currently depressed energy prices
International Petroleum Investment Co. will continue to invest in the energy sector despite the slide in oil prices but the focus is now on upstream assets, Khadem Abdulla Al Qubaisi told The Wall Street Journal.
“When the oil prices are coming down to $50 or $40 or $30 a barrel, the spending will continue but you will shift a little bit,” Mr. Qubaisi said. “Is there a major change here, a big change? No, we will continue [spending],” he said.
But “there is more focus towards E&P due to the low oil-price environment. We are in the due diligence [process] for some companies. IPIC started global and will continue as a global player, not as Middle Eastern,” Mr. Qubaisi said. He declined to name the companies that IPIC is currently reviewing for potential investments.
IPIC, which is a state-owned fund with a main mandate to invest in energy-related assets, is however not keen on investing in refining and marketing due to the low margins in that area at the moment, Mr. Qubaisi noted.
To that extent, he said the company is also “restructuring, optimizing” its existing assets in Spain’s Cepsa and Austria’s OMV due to the current situation in the market, but didn’t provide more details.
Cepsa, an energy company fully-owned by the Abu Dhabi fund since 2011, plans to focus primarily on its E&P and petrochemical business units as part of its strategic plan posted on its website. IPIC has a 24.9% stake in OMV.
An oil slump since the middle of last year due to a supply glut has weighed on the growth plans of most energy-related entities, pushing them to cut costs and realign their strategies amid expectations that crude prices are likely to remain low in the near future.