Abu Dhabi National Oil Company (ADNOC) and Morocco’s OCP Group agreed to explore the phased creation of a new global fertilisers joint venture, in a move that will push both the entities international strategies.
The proposed joint venture will build on both companies’ competitive advantages, namely ADNOC’s sulphur production, ammonia and gas expertise, and shipping and logistics network, and OCP’s access to large phosphate resources, its lengthy fertilisers experience and its marketing network, to develop a new global fertilisers producer, ADNOC said in a statement.
The proposed partnership will comprise two fertiliser production hubs, one in the UAE and one in Morocco (utilising both existing and new assets), giving the proposed joint venture global market reach.
The agreement aligns with ADNOC’s announced plans to increase production by at least 50 per cent from its current levels of 7 million tons a year, as it looks to increase gas production by tapping into vast gas caps and scaling up sour gas production. OCP has engaged in a large-scale development program that will enable it to capture its fair share of growing demand for fertilisers. The first phase of this program was completed this year and has brought the Group’s existing fertiliser capacity to 12 million tons, and rock export capacity to over 18 million tons.
H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “The proposed joint venture with OCP Group illustrates ADNOC’s intent to maximise the value of all our resources, as we grow our downstream business, diversify our product range and increase revenues. The agreement builds on the expanded partnership model we announced last year, as we open our entire value chain to reliable, value-adding, long-term partners, who can complement our capabilities and resources, and enhance our market access.
“Importantly, this agreement is aligned with the directives of our leadership to further build on the existing close relationship and ties between the United Arab Emirates and Morocco, and we look forward to building on these firm foundations as we work towards potentially building a new global fertilisers champion.”
Mostafa Terrab, OCP Group chairman and CEO, said: “This collaboration between our companies brings together the world’s largest phosphate reserves and the world’s largest sulphur production capacity and it represents an unprecedented alliance in the industry, providing the partners with a world-class integrated asset base and complementary geographic locations. We view this new partnership as a unique opportunity, in line with our global strategy that will contribute to our ability to serve growing demand for fertilisers worldwide.”