International Petroleum Investment Company: A fresh start

IPIC has been on a journey to rebuild its business following the extraordinary downfall of Khadem al-Qubaisi, the company’s managing director who was made to step down in April 2015. In the months that followed, there was a major shakeup across all levels of the organisation including in the portfolio companies, with many of the roles previously held by al-Qubaisi reassigned to new officers. At the time, IPIC did not release any statements around al-Qubaisi’s dismissal, but in the months that followed, there was increasing newsflow in the media around alleged embezzlement of funds from business dealings between IPIC and 1MDB, a Malaysian sovereign wealth fund. Al-Qubaisi was arrested in August 2016.

OGInsights spoke with representatives of IPIC to find out more about the restructuring within IPIC. Suhail Mohammed Faraj Al Mazroui, the UAE energy minister, now heads IPIC with the group split into two divisions: Upstream and Downstream & Diversified.

The Upstream division is headed by Alyazia Ali Al Kuwaiti and includes the holdings in CEPSA, OMV and Oil Search.

Downstream & Diversified is headed by Saeed Mohamed Al Mehairbi  and includes the holdings in Nova Chemicals and Borealis and various business interests previously held by Aabar (including real estate and private jet businesses).

The IPIC team also act as source deals for Qatar Abu Dhabi Investment Company (“QADIC”), which is a joint Qatar and Abu Dhabi fund. The fund has a size of USD2 billion and aims to target investments with a link to IPIC’s downstream holdings. However, IPIC and QADIC will be cautious with making new investments given the recent tumult and will have plenty to focus on managing its existing portfolio.

In the upstream space IPIC will continue to look for acquisitions, which will be routed through CEPSA or OMV. IPIC aims to maintain a balanced portfolio with existing or near-term production / cash flow and keen to avoid heavy capex commitments. Africa remains a keen focus area (excluding Nigeria) as is Latin America, which will neatly complement the CEPSA portfolio.

In the downstream space, North American chemicals and fertiliser businesses are of interest. In Europe, only specialty chemicals are seen as a good fit (i.e. with Borealis).