Abu Dhabi National Oil Co (Adnoc) is preparing to sell stakes in its pipeline assets to help fund plans to expand its overseas refining footprint, a source familiar with the matter said.
If the sales go through, Adnoc may use the proceeds to invest in Asia further, where the bulk of crude demand growth is projected to occur, said the source, who spoke on the condition of anonymity. Adnoc has already announced an investment in the $44 billion, 1.2 mbpd Ratnagiri refinery in India alongside Saudi Aramco.
“If they can see an opportunity in Asia, they will consider it,” the source said.
Adnoc has no confirmed timeframe for selling the pipeline assets, but the plans are advanced and the next step would be to market the assets to potential investors, the source said, adding that Adnoc is engaging with banks on the potential sales.
The company’s vision is to change its strategy and brand, and operate more like an international oil company, central to which is balancing out margins in the downstream segment.
An Adnoc spokesman said the UAE company was “exploring a number of potential innovative transaction opportunities that will unlock value and enhance returns.”
Adnoc earlier this year announced it was investing Dh165 billion ($45 million) in its downstream sector over the next five years, the centerpiece of which is a 600,000 bpd expansion of the Ruwais refinery complex that will take the company’s total refining capacity to 1.5 mbpd.
Adnoc, which pumps the vast majority of the UAE’s crude, has joined other state-owned Middle East producers in rapidly expanding its refining and petrochemical businesses, as they seek outlets for their oil.Adnoc has long been rumoured to be mulling a public listing, but the source said that such a move is not on the table. Nor is a public listing of its upstream segment, he added.
“Adnoc is not going to do an Aramco, that’s all just speculation,” he said, referring to the oft-delayed plans for Saudi Arabia to publicly offer up to 5 per cent of the state-owned oil company.
However, a sale of further stakes in Adnoc’s services companies could be possible, the source said.
Adnoc earlier this month announced Baker Hughes would take a 5 per cent stake in its drilling subsidiary for $500 million, and Adnoc last year raised $851 million from a public listing of its fueling stations arm, Adnoc Distribution.
Meanwhile, Abu Dhabi National Oil Company Offshore (Adnoc Offshore), the oil and gas company’s delivery arm, has installed all ‘supercomplex’ facilities at the Nasr oil field off the coast of the UAE capital.
The company described the megastructure “as one of the largest supercomplexes in the world”, according to a tweet from Adnoc Group’s official Twitter account on October 21.
In conjunction with oil prices reaching a four-year high this month, petroleum-producing nations, such as the UAE, are ramping up oil production in response to rising demand and mounting US sanctions on Iranian exports.
Adnoc Offshore successfully and safely completes the installation of all Nasr supercomplex facilities. This megastructure is one of the largest supercomplexes in the world., with Nasr field contributing to Adnoc’s end of 2018 oil production capacity target of 3.5 mbpd.