Oil giant Abu Dhabi National Oil Company (ADNOC) has signed a strategic partnership with Italy’s Eni and Austria’s OMV in which both companies will acquire stakes in ADNOC refining.
As per the deal, Eni and OMV will acquire a 20% and 15% equity interest in ADNOC Refining for $3.3 billion and $2.5 billion respectively. The state-owned oil producer will own the majority stake with 65% and will receive $5.8 billion for divesting its 35% share – making the deal one of the largest ever refinery transactions.
The companies also agreed to establish a trading joint venture with the same shareholding proportion as in the refining business. This new JV will market export volumes and optimize the non-Abu Dhabi feedstock supply of ADNOC Refining.
ADNOC Refining operates the world’s fourth-largest single site refinery complex (Ruwais East and West), with a total refining capacity in excess of 900,000 barrels per day.
The trading joint venture will also be an international exporter of ADNOC Refining’s products, with export volumes equivalent to approximately 70% of throughput. The domestic supply within the UAE will continue to be managed by ADNOC.
Trading activities are expected to begin as early as 2020. This meets the global fuels demand that will increase by 9% from 2017 to 2030 driven by the Asia Pacific region, according to World Energy Outlook 2018 by International Energy Agency (IEA).
Last November, ADNOC revealed plans to increase oil production capacity to 4 million barrels per day by the end of 2020, and to 5 million barrels per day by 2030.
Eni has been present in the UAE upstream sector since March 2018 when it was awarded a 10% interest in ADNOC’s Umm Shaif and Nasr concession and a 5% interest in the Lower Zakum concession, followed in November 2018 by the award of a 25% interest in the Ghasha Concession - ADNOC’s mega offshore gas project.
On January 12 this year, Eni was awarded a 70% interest in offshore exploration blocks 1 and 2