Positioned to adapt in new energy landscape

Musabbeh Al Kaabi, CEO, Petroleum and Petrochemicals, Mubadala Investment Company speaks about strategy and innovation

Tell us about Mubadala Investment Company, and its energy portfolio specifically.

 Mubadala Investment Company is a global investor active across 15 sectors with businesses and partnerships in more than 50 countries worldwide. Our assets under management are valued at over US$229 billion. The company’s petroleum and petrochemicals platform, with its global portfolio of operating companies active across the full oil and gas value chain, represents an important and very substantial component of the broader portfolio. We also have a world-leading renewable energy business, Masdar, and utilities interests across the globe.

What are some of the key milestones from the past year for the energy business, and how they fi t into your wider strategy?

Last year was a successful year for us as an investor, as well as for our operating companies. Our upstream businesses made some exciting progress in delivering key projects. For example, Mubadala Petroleum advanced the development of the Pegaga Gas Field in Malaysia, and entered Egypt by acquiring interests in the Shorouk and Nour concessions.

In partnership with PTTEP, the company was also successful in bidding for the major Erawan gas field in Thailand. As well as being commercially attractive, these projects contributed to increasing the proportion of gas in our portfolio, which is a strategic priority.

Investments were also made by Cepsa and OMV in oil projects with cost-effective development and operating costs located offshore in Abu Dhabi. We also entered Russia through Mubadala Petroleum’s JV with RDIF in partnership with Gazpromneft.

In downstream, our assets Borealis and NOVA Chemicals teamed up with Total in the U.S. Gulf Coast to pool their respective technologies, market positions and operating experience to leverage access to competitively priced feedstock.

Back home in the UAE, we continued supporting the development of Abu Dhabi’s downstream capabilities, particularly through the expansion projects being pursued by the Borouge JV and Cepsa’s studies to bring its proprietary LAB technology to Ruwais. These are just some examples that illustrate the very active investment programs in which we and our portfolio companies are engaged.

What are the industry trends you’ve noticed, and how do they impact your role as an investor? The energy industry is going through an era of disruption driven by technological innovations, environmental concerns and geopolitical challenges.

Nevertheless, driven by population growth and an expanding middleclass, energy demand is forecast to grow by 27 per cent worldwide between now and 2040, according to research by the International Energy Agency.

Whilst the energy mix is undoubtedly changing, we will still need to invest in all sectors of the energy industry to meet this demand, and also to provide strong, lightweight materials that these demographic trends and the rising demand for technology based products require. In renewables, Mubadala was a strong early mover through its establishment of Masdar.

Our other portfolio companies are also investing in this and other areas of the energy market to ensure they can meet the requirements of their customers. There are also some fast emerging challenges, such as the use and poor disposal of single-use plastic products waste.

Our portfolio companies are responding rapidly, with NOVA Chemicals, Borealis, OMV and Borouge all addressing the challenge through directly tackling waste where it is most prevalent, investing in mechanical and chemical recycling technology, and increasing levels of recycled material in their feedstock and products.

They are at the forefront of the plastics “circular economy.” As an investor responding to these trends, innovation is undoubtedly the key. In this regard, Mubadala is, perhaps, uniquely positioned through the insights we gain from our investments in technology. We are able to gain first-hand knowledge of both the technology itself – be it digitalisation, AI, battery technology or automation – but also the impacts that it is having across a wide range of industrial and commercial sectors. There are just a few examples of how we are adapting to the new energy landscape.

What are the key priorities for Mubadala’s energy business going forward?

We are committed to the growth of our businesses through fi t-for-future investments and commercially attractive projects helping to meet rising global energy demand. Our investment decisions are based on the fundamental principles of creating long-lasting value for our shareholder, supporting the UAE’s economic growth and promoting responsible, environmental and safety stewardship.