Tuesday, September 25, 2007

Abu Dhabi in the Calgary oil patch

The Globe and Mail reports:
With oil revenues rolling in at a rate of $225-million (U.S.) a day, the United Arab Emirates has become a hotbed for outbound investment, and a Persian Gulf hub for finance, tourism and trade.

A government-owned energy company of one of those emirates, Abu Dhabi, said yesterday it has struck a $5-billon deal to take over Calgary-based PrimeWest Energy Trust. Abu Dhabi, the largest and wealthiest of the seven affiliated emirates, has the world's largest state-owned investment fund, and is flexing its financial muscles around the world, though its activities are cloaked in secrecy.

Abu Dhabi Investment Authority is estimated to have assets as high as $875-billion (U.S.), by far the world's largest government-controlled investment pool, in an emirate controlled by one man, Sheikh Khalifa bin Zayed Al Nahyan, on behalf of a population of fewer than two million.
In Canada, the Conservative government has raised concerns about takeovers by state-owned companies that don't operate with transparency and according to market-based principles. The Foreign Investment Review Agency will review TAQA's bid for PrimeWest.



Blogger Acad Ronin said...

1) I wouldn't worry about much about these soveriegn investment funds. The host country always retains the right to nationalize a company if necessary.

2) Why is Abu Dhabi investing in the energy sector? Shouldn't it put its investments into energy using sectors such as airlines instead? That way, when oil prices are high it wins on its oil what it loses on its financial investments; when oil prices are low, it wins on its investments what it loses on its oil revenues.

7:16 PM  

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