IPIC: A Low-Key Approach to Oil-Related Acquisitions

Strategic Insights -

IPIC was created in 1984 as a 50-50 venture between ADIA and ADNOC to focus on oil-related acquisitions overseas. Shaikh Mansour Bin Zayed Al Nahyan, son of the Abu Dhabi ruler and UAE president, is the chairman of IPIC's nine-member board. The company's acquisitions are decided on the basis of their financial merits, as judged by ADIA, and their strategic importance to Abu Dhabi's hydrocarbon sector as judged by ADNOC. This cautious approach has resulted in IPIC preferring to invest just enough to have a strong influence, rather than acquiring controlling equity.

Key Takeaways:

  • IPIC was established in 1984 as a joint venture between ADIA and ADNOC, with a 50-50 stake.
  • Shaikh Mansour Bin Zayed Al Nahyan, son of the Abu Dhabi ruler and UAE president, is the chairman of IPIC's nine-member board.
  • The board consists of four members from ADIA and five members from ADNOC, with ADIA's executive Juan Bin Salim Al Dhaheri as deputy chairman.
  • ADIA and ADNOC have a joint say in IPIC's acquisitions, which must be approved by both entities, taking a long time.
  • IPIC has a low-key style, preferring to invest just enough to have a strong influence, rather than acquiring controlling equity.
  • Shaikh Mansour was appointed chairman of IPIC in September 1994, with a reshuffled board of directors, to upgrade IPIC's efficiency.
  • The appointment was also aimed at lessening ADIA's influence on IPIC's management and avoiding the mistakes that led to the collapse of the Bank of Credit and Commerce International (BCCI) in July 1991.
  • IPIC has a 19.56% stake in the Austrian oil and gas giant OeMV and a 25% stake in the European polyolefins producer Borealis, with OeMV and IPIC each holding 25% in Borealis.

Statistics:

  • IPIC was established in 1984 as a 50-50 joint venture between ADIA and ADNOC.
  • ADIA and ADNOC have a joint say in IPIC's acquisitions, with both entities required to approve acquisitions.
  • IPIC has a 19.56% stake in OeMV.
  • IPIC has a 25% stake in Borealis.
  • IPIC's chairman, Shaikh Mansour Bin Zayed Al Nahyan, has been in position since September 1994.

Sources:

  • The Gulf Analysis
  • DT No. 3

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