Mubadala’s Musabbeh Al Kaabi on Creating Value through Partnerships

That's a great question, Manas. Let's talk about the deal. We are very glad to reach an agreement with Carlyle to sell 30 to 40 percent of one of our best-performing assets in the portfolio. Cepsa is a fully integrated oil and gas company, 90 years old, and Abu Dhabi started the investment back in 1988. We acquired 100 percent of the company back in 2011. In the last few years we have worked closely with the management team to create a fully integrated company that is active in the hydrocarbon value chain and lately expanded into renewable energy as well. The company is the largest privately owned integrated oil and gas company in Europe. We thought it's the right time to explore bringing in a partner or floating part of the company. Partnership is part of our DNA, so we are very glad to have reached an agreement with Carlyle. They bring solid experience and a track record, especially their energy team, and we're looking forward to working with them and taking the company to the next journey.

When you think about the Carlyle team and Mubadala team, we're driven by one principle: value creation. We had very long discussions with Carlyle and we're perfectly aligned. We have a common view on the strength of the business, a common view on how to unlock additional value, and they bring a fresh look at the business. There are definitely many things we can do.

We were very transparent from day one. We announced this transaction back in early 2018 and were very clear that we were exploring two tracks — the IPO track and the M&A track. I remember I had a discussion with you after we decided to pull the transaction, and you pushed me hard on what oil price would satisfy Mubadala, and I told you it has nothing to do with oil price. It is a fully integrated company, partially hedged, and when we think it's the right time we will do it. We are fully satisfied with the agreement and the value — 12 billion dollars enterprise value demonstrates clearly that the business is very strong.

That's a great question again. We came up with a very clear strategy. We know which sectors we would like to invest in, and as mentioned earlier, we are active in 15 sectors — technology, infrastructure, real estate, healthcare, oil and gas. The way we work is that the money goes to a central pool and all the sectors need to compete for that capital. We also have a certain capital allocation for each sector, so we have a proper mechanism to redeploy these proceeds into the right sectors.

Well, if Khalid al-Falih said something, he's right — we're not going to lean into that conversation. Let me highlight our strategy. The petroleum and petrochemical platform at Mubadala has an asset value slightly north of 40 billion dollars. We are active in the full value chain with a very strong position globally in petrochemicals — we have a strong position in Borealis and 100 percent ownership of Nova Chemicals. On the upstream natural gas side, we have an institutional view that natural gas will enjoy very healthy growth going forward — almost 2 percent CAGR — and that drives our philosophy and strategy. Since the start of Mubadala with Dolphin, we are heavily weighted into natural gas. We recently acquired a 10 percent stake in the largest gas field in the Eastern Mediterranean — the Zohr field in Egypt — almost 30 TCF gas in place. We're also developing a multi-TCF gas discovery in Malaysia, and recently we were awarded with PTT in Thailand — the largest gas field in Thailand, the Erawan project, producing currently 1.2 billion cubic feet per day of natural gas. Our latest investments clearly show we're biased toward gas. We believe natural gas will enable us to move from a high-carbon economy into a low-carbon economy. That is the conversation I had yesterday in Saudi Arabia about the movement to a circular economy.

We are strong believers in renewable energy. Abu Dhabi was probably the first player in the region to embrace that technology when we incubated Masdar back in 2006. People were questioning Abu Dhabi — why a country rich in oil and gas would embrace a potentially disruptive technology. Because that's what Abu Dhabi is all about, that's what Mubadala is all about. We try to be part of the future.

We have a well-established platform. Masdar is our company that is very active in the renewable space. As I mentioned, we institutionally believe in a future where all sources of energy will be required, and renewable energy will definitely be part of that mix. Cepsa has lately moved into renewables and wanted to be part of that ecosystem. We're monitoring the space and would like to remain a significant and key player in the renewable space.

Nova Chemicals is one of the crown jewels in the portfolio. Of the 40 billion dollar portfolio, we are extremely satisfied currently with the financial and operating performance of the platform. From time to time we look at our portfolio and try to identify the right levers to create more value. If there is any change to our platform or portfolio management, we will definitely share it with you and others.

One key lesson learned for me: if you believe in a business, you should stay with your belief. There were points in the IPO where we were encouraged to look at the valuation, but we kept our line consistent. Cepsa is a well-established, solid business. We believe in the future of this company, we believe in the business fundamentals. One thing Mubadala will definitely not do is compromise on value. You need to believe strongly in your business — that's the key lesson I would deliver to everyone in this room.

As highlighted by Khaldoon and Waleed, partnership is part of our DNA. We truly believe in partnerships. We are open for business. Abu Dhabi has always been — if you take the oil and gas industry for example, we have a long history of partnering with the leading IOCs, and we're going to continue believing in that mode of operation. We will create the right environment, the right ecosystem to attract more investors in Abu Dhabi. We have all the requirements and ingredients to become a central financial hub of the region.

In the petrochemical business, if you look at the three sectors: oil is enjoying probably 1 to 1.5 percent annual growth with a big question mark on peak demand sometime in the future — 2030, some say 2040. Gas, on the other hand, is enjoying a more aggressive 2 percent CAGR and looks like it has a bright future. Renewable is even more aggressive. Petrochemical is enjoying growth slightly above global GDP, and we see it institutionally as an enabler for future technology disruptions, because the demand for light materials will increase, and where you're going to get this light material — definitely from polyolefin and plastics.

On the petrochemical side, it's similar to the other sectors — it's cyclical. Demand is relatively speaking strong. People invest and once you over-invest, you create more supply.

We have about 15 seconds for the answer! We can pick it up tomorrow at 8:30 on the TV. You're going to talk to the minister tomorrow, so I'll leave that to the Minister of Energy to talk about it.