Abu Dhabi National Oil Company (ADNOC) said on Monday it is mulling the IPO of minority stake in some of its services businesses and setting up new partnerships to span across its entire value chain.
“There will be no IPO of ADNOC, the group holding company. ADNOC will remain fully owned by the government of Abu Dhabi," the company said.
ADNOC's plan to list some of its services businesses comes as other Gulf states, such as Saudi Arabia and Oman, have also unveiled plans to list their energy assets.
Saudi oil company Aramco is planning a listing next year to raise as much as $100 billion for investment in new industries, as the kingdom seeks to diversify its economy away from oil exports.
Oman said earlier this year it planned to offer shares in some state-owned downstream energy companies to the public.
ADNOC Group CEO said the new co-investment approach would lead to a "more open partnership model”.
“Expanding our partnership model… will enable us to accelerate our growth, increase revenue and improve integration across the ADNOC value chain. It will also spur domestic economic growth as well as bring new jobs and benefits to the UAE and its citizens.” Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO said.
ADNOC’s criteria for new partners is investors who can help in securing better access to growth target markets such as Asia, contribute technical expertise, co-develop new technologies and co-invest in ADNOC’s value chain.
Potential areas for partnership under consideration by ADNOC include the further development and expansion of a regional drilling company and a new energy infrastructure venture that could bundle ADNOC’s infrastructure assets such as oil, gas or refined products pipelines and storage facilities.
It also includes downstream partnership opportunities to improve integration, and expand output to meet rising global demand for petrochemical products.
ADNOC will remain the major shareholder in any potential new partnership.
“Our new partnership model represents an ambitious new direction for ADNOC that will allow us to compete and lead in the new energy era,” Al Jaber said.
The new model of partnerships, which is more open than before, falls under ADNOC’s 2030 strategy, which aims for a more profitable upstream business, a more valuable downstream business, and an economic and sustainable supply of gas for Abu Dhabi.
In upstream, ADNOC is adapting to the evolving market environment by maximizing operational efficiencies, increasing crude oil production capacity targets, and reducing costs.
In downstream, ADNOC aims to stretch the margin of each refined barrel of oil and expand petrochemical production from 4.5 to 11.4 mtpa by 2025.
In the gas business, ADNOC is looking to develop a variety of natural gas sources, including tapping into gas caps and undeveloped deep and sour gas reserves.
ADNOC said it will seek to capitalise on its success and experience in sour gas development as it explores a potential US$20 billion investment to develop the Hail, Ghasha, Delma, Nasr and Shuwaihat fields, which could produce 1.2 Bscfd of gas.
It also aims to increase production from its Shah field to 1.5 Bscfd and explore commercially sound avenues of developing the sour gas fields of Bab and Buhasa. In addition, the company will deploy innovative technology such as Carbon Capture Utilisation and Storage to replace natural gas with C02 in Enhanced Oil Recovery - thereby liberating gas for other purposes.