I am in Abu Dhabi – and so are the Opec oil ministers, or they were until a few hours ago. For those of you who have got your Emirates in a twist – Abu Dhabi is bigger and less flashy than Dubai. It also has far more oil – almost 10% of the world’s reserves, plus 5% of its natural gas.
So there is quite a lot of spare cash here. Abu Dhabi’s Sovereign Wealth Fund is thought to be the largest in the world – bigger than China’s. Nobody knows quite how much money it has to spend. But the lowest estimate I’ve heard is $500 billion – and the highest is $1 trillion. They recently snapped up 4.9% of Citigroup, and already own bits of Ferrari and the Carlyle Group.
The Emirates Palace Hotel, where Opec were meeting, is easily the most opulent hotel I’ve ever visited. Even part of the driveway is made of marble – a Porsche Cayenne trying to brake on marble makes a very loud squeak. The lobby (also all marble, naturally) is the size of a football field. The pianist there looked a bit like Condi Rice – although I dont think it has quite come to that, yet. One journalist who was staying at the hotel was startled to find a butler hovering in her room – asking her what temperature she would like her bath to be run. (She said that, on balance, she would prefer a shower – and he made his excuses and left.)
Given all this, it was a little hard to swallow when Opec people tried to argue in favour of the current high oil price, on the grounds that their members need more cash to spend on schools and hospitals. The Emirates Palace hotel alone cost $2 billion to build. Of course, there are Opec members that are genuinely still quite poor – Iran, Ecuador etc. But pleading poverty in Abu Dhabi is tricky.