ABU DHABI — The emirate of Abu Dhabi plans to make major investments in foreign oil companies as a safeguard against oil price fluctuations, an oil industry official said Monday.
Khalifa Mohammed al-Shamsi, general manager of the state International Petroleum Investment Company (IPIC), said at least 10 projects are being considered. They cover oil marketing and refining as well as petrochemicals.
"We are discussing at least 10 agreements with foreign companies, and some deals only await a decision to be finalized," he told Reuters.
IPIC paid $124 million in February for a 10% stake in Cepsa, Spain's main refining and petrochemical company, and got two seats on the firm's board. Oil sources said the deal, Abu Dhabi's first investment in the downstream oil industry, enabled it to market 60,000 barrels of oil per day.
Shamsi declined to name the cost of any new investment deals or the firms involved, but he said, "They range between medium and major deals and some of them are bigger than the agreement with the Spanish company."
Shamsi said Abu Dhabi has a plan to buy more Cepsa shares, "but that depends on Cepsa itself."
IPIC, with capital of $500 million, was set up in 1984 by the Abu Dhabi National Oil Co. and the Abu Dhabi Investment Authority. It was fully taken over by the government in 1986.
Shamsi said the proposed deals were designed to protect government revenues from the effects of unstable oil prices.
Abu Dhabi, the largest emirate in the United Arab Emirates, produces more than two-thirds of the country's OPEC-assigned quota of 949,000 barrels per day.
But the Nicosia-based Middle East Economic Survey estimated that in the first half of May its daily output was as high as 1.03 million barrels.