While North American shale may be competition for OPEC members, some oil-exporting countries in the Persian Gulf are simultaneously banking on the commodity as a potential investment opportunity.
The United Arab Emirates is one of them, and Musabbeh al-Kaabi, chief executive of Abu Dhabi’s Mubadala Petroleum and Petrochemicals, is keeping an eye on U.S. shale.
The petrochemicals firm is a major component of Mubadala Investment Company, Abu Dhabi’s state-owned holding company. It operates as a sovereign wealth fund with assets of more than $360 billion, and is aimed at diversifying the emirate’s economy.
“We as an investor made big investments in the last 18 months, north of $12 billion dollars, and some of these big investments are happening in North America,” al-Kaabi told CNBC’s Hadley Gamble during the Atlantic Council Energy Forum in Abu Dhabi.
This was for two simple reasons, the CEO said. “It is a big market and it is enjoying a highly competitive feedstock. So we like the business in that part of the world because of these two reasons.” Feedstock refers to raw material, such as crude oil, that is processed for conversion into a different, or refined, product — like gasoline.
“Other parts of global energy I would say, the energy industry, the price would be set by the high cost producers going forward,” al-Kaabi added. “And who are the high cost producers nowadays? The shale producers. And we will keep monitoring what is happening in that part of the world.”