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ADNOC and nine others to be partners for ICE futures Abu Dhabi exchange

Nov 11, 2019
4 min read
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Intercontinental Exchange, Inc., a leading operator of global exchanges and clearing houses and provider of data and listings services, has announced that Abu Dhabi National Oil Company (ADNOC) and nine of the world’s largest energy traders are partnering with ICE on the launch of ICE Futures Abu Dhabi, a new exchange in Abu Dhabi Global Market that will host the world’s first Murban crude oil futures contracts.

The nine companies supporting the launch of ICE Futures Abu Dhabi are; BP, GS Caltex, INPEX, JXTG, PetroChina, PTT, Shell, TOTSA (Total) and Vitol.

The news follows the announcement from ICE regarding the planned launch of ICE Futures Abu Dhabi and ICE Murban futures in the first half of 2020, subject to relevant regulatory approvals. “Partnering with ADNOC and nine of the world’s largest physical traders of Murban crude to launch ICE Futures Abu Dhabi is a significant endorsement and strong signal of the potential for Murban to become a new global crude benchmark,” said Jeffrey C. Sprecher, Chairman and CEO Intercontinental Exchange.

“Intercontinental Exchange is one of the world’s most recognised and leading operators of global exchanges and clearing houses and ADNOC is pleased to be a part of this significant new venture which will strengthen Abu Dhabi’s position as a global energy hub,” said His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO.

“We are particularly pleased that nine leading global energy companies, all of which are our partners and customers, have decided to join us in this initiative. Having a new, independent exchange in Abu Dhabi will not only benefit the UAE, but also physical and financial oil traders around the world.” ICE Murban Futures will be a physically delivered contract with delivery at Fujairah in the UAE on a free on board (FOB) basis. Murban Crude is a light sweet crude produced by ADNOC. ADNOC produces roughly three million barrels of oil per day, of which approximately 1.7 million barrels per day is Murban crude.

On November 4, Abu Dhabi’s Supreme Petroleum Council (SPC) announced that it would implement a new pricing mechanism for ADNOC’s Murban crude. As a result, Murban pricing will move from a retroactive official selling price to market-driven, forward pricing using a Murban futures contract as its price marker. The SPC also authorised ADNOC to remove destination restrictions on Murban crude sales. With the support of ADNOC, the Murban futures contract referenced by the SPC will be hosted on ICE Futures Abu Dhabi.

“The recent decision by the SPC and the launch of a new exchange in Abu Dhabi by ICE marks a historic change in the way Murban crude will be priced and traded,” said H.E. Dr. Sultan Ahmed Al Jaber. “For the first time, Murban will be priced on a forward looking, market-driven basis based off the ICE Murban future, offering the market greater transparency and certainty.

The launch of ICE Futures Abu Dhabi further reinforces Abu Dhabi’s status as a global energy hub, and supports ADNOC’s continued transformation into a more modern and progressive energy company.”

“ADGM is pleased to be the preferred international jurisdiction that supports Intercontinental Exchange and ADNOC in launching the world’s first Murban crude futures contracts,” said His Excellency Ahmed Ali Al Sayegh, Minister of State (UAE) and the Executive Chairman of Abu Dhabi Global Market. “This development marks momentous progress within the energy industry and adds new vibrancy to the capital markets of the UAE and wider Middle East region. We welcome IFAD as an important international exchange to the ADGM family, which adds to our diverse global community.”

Contracts traded at IFAD will, subject to regulatory approval, be cleared at ICE Clear Europe, one of the world’s leading clearing houses, and will clear alongside ICE Brent, ICE WTI, ICE (Platts) Dubai and ICE Low Sulphur Gasoil allowing customers to benefit from associated margin offsets and delivering meaningful capital efficiencies. IFAD and ICE Clear Europe are working to receive regulatory approval from key jurisdictions and, subject to receiving these, expect to launch in the first half of 2020.

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