ADNOC has signed two strategic equity partnerships with ENI and OMV covering ADNOC Refining and a new trading joint venture.
In one of the largest ever refinery transactions Eni and OMV will acquire 20% and 15% shares in ADNOC Refining respectively, with ADNOC owning the remaining 65%.
The agreement values ADNOC Refining, which has a total refining capacity of 922,000 barrels per day at an enterprise value of $19.3 billion.
Additionally, as part of the agreement, the partners will also establish a trading joint venture, in which Eni and OMV will own 20% and 15% of the shares respectively.
The transaction reflects the scale, quality and growth potential of ADNOC Refining’s assets, coupled with an advantageous location from which to supply markets in Africa, Asia and Europe.
Further value will be created from the new global trading joint venture, which, once established, will be an international exporter of ADNOC Refining’s products, with export volumes equivalent to 70% of throughput. Domestic supply within the UAE will continue to be managed by ADNOC.
His Excellency Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, says: ‘We are delighted to partner with Eni and OMV in our refining business and the new trading company. Such partnerships follow our leadership’s wise guidance to unlock and drive greater value across our business.
‘These innovative partnerships will support our ambition of becoming an international downstream leader with the flexibility to respond quickly to shifting market needs and dynamics. They will help enable our objective of unlocking even more value from every barrel of oil we produce.’
The three partners have committed to substantial growth plans for ADNOC Refining in the short to mid-term. They have also agreed to a comprehensive capital allocation framework to achieve self-funded growth, paired with an attractive dividend policy.
The partnerships will support ADNOC as it expands refining and petrochemical operations at Ruwais and secures greater downstream global market share.
Claudio Descalzi, CEO of Eni, says: ‘This transaction, which allows us to enter the UAE’s downstream sector and represents a 35% increase in Eni’s global refining capacity, is in line with our announced strategy to make Eni’s overall portfolio more geographically diversified, more balanced along the value chain, more efficient and more resilient to cope with market volatility.’
The trading joint venture will be incorporated at Abu Dhabi Global Markets. Physical and derivative trading will likely begin as early as 2020 when all necessary processes, procedures and system are in place. The venture will help guide ADNOC Refining’s activity and operational decision-making, ensuring ADNOC secures the best possible value from its refining and trading activity. The joint venture will expand its global presence over time.