Plans to list a minority stake in ADNOC Distribution, the UAE’s largest fuel distributor and convenience store operator, on the Abu Dhabi Securities Exchange (ADX), have been confirmed by H.E. Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO.
Delivering the opening keynote address at ADIPEC, one of the world’s leading oil and gas conferences and exhibitions, H.E. Dr Al Jaber said the decision to launch the ADNOC Distribution IPO is an historic moment for ADNOC and the first time it has placed shares, of one of its subsidiary companies, onto the public markets. The planned IPO of ADNOC Distribution will be subject to the finalising of all regulatory approvals, including those approvals from the UAE Securities and Commodities Authority, and the ADX.
“The planned IPO, to be listed on the Abu Dhabi Securities Exchange, will offer both UAE and international investors an unprecedented opportunity to invest alongside ADNOC in one of the region’s leading retail brands,” H.E. Dr Al Jaber said.
“This marks a major milestone in our history and a significant step-change in our transformation. Importantly, it also signals a new chapter in the growth and development of the UAE’s capital markets. But to be clear, ADNOC at a holding company level, will always remain wholly owned by the Abu Dhabi Government.”
H.E. Dr Al Jaber said the proposed IPO is in line with the vision of the UAE’s wise leadership, which has set ambitious socio-economic goals to ensure a sustainable and prosperous future for the nation. Coupled with ADNOC’s new approach to partnership and active portfolio management, he said, the planned IPO would underpin ADNOC’s integrated 2030 strategy that is focused on unlocking the full potential of its entire value chain to deliver a more profitable upstream; a more valuable downstream and an economic, sustainable gas supply.
Upstream ADNOC is on track to expand production capacity to 3.5 million barrels per day, utilising innovative technology to improve performance and cut drilling time by 30 percent. H.E. Dr Al Jaber stressed that increasing operational efficiency is reinforcing ADNOC’s position among the world’s lowest-cost producers and attracting a diverse class of international partners, which is reflected in the interest for the upcoming offshore concessions, which have attracted over 10 potential partners from around the world.
Turning to the Midstream, H.E. Dr Al Jaber said ADNOC would continue to develop its natural resources by accessing undeveloped reservoirs, tapping into vast gas caps and scaling up sour gas production, using best in class methods developed in the UAE.
In Downstream, ADNOC plans to grow crude refining capacity by 60 per cent and more than triple its petrochemical production. This expansion will make Ruwais the single largest integrated refining and chemicals site in the world. Once complete, ADNOC will convert almost 20 per cent of its crude to chemicals, diversifying its range of higher value products and providing a natural hedge to oil price movements.
In parallel to these efforts, H.E. Dr Al Jaber said, ADNOC will ensure its expanded portfolio of products gain better market access, by focusing on new centers of growth and diversifying its customer base. It also plans to introduce non-speculative asset-backed trading to further stretch the dollar from every barrel it produces.
“All these integrated efforts will ensure ADNOC delivers shareholder value, strengthens the UAE economy and sets a new benchmark for what success looks like in a modern energy company,” H.E. Dr Al Jaber added.
ADNOC’s Group CEO said he was encouraged by a global economy that is growing at the highest rate since 2011. Describing the fundamentals of the global economy as positive, H.E. Dr Al Jaber said the rate of growth is driving demand for oil and gas products and moving the oil market in the right direction. He praised the role of the OPEC and non-OPEC framework agreement in stabilising the oil market.
However, H.E. Dr Al Jaber sounded a note of caution, saying the industry cannot ignore the shifting dynamics of the global energy mix. These had pushed ADNOC to act nimbly, think creatively, and challenge its traditional business models.
“At ADNOC, we are embracing the future to create a new type of National Oil Company, that meets the needs of today, while adapting to secure tomorrow’s success,” H.E. Dr Al Jaber said. “To achieve this, we have set out to transform the fundamentals of our business We have expanded our approach to partnerships, enhanced our capital structure, to more efficiently finance our business, and revised the way we manage our portfolio of assets to unlock lasting value.”
H.E. Dr Al Jaber said ADNOC is firmly focused on the future, adding that it was embracing new technologies, including artificial intelligence, as it strives to become highly efficient and performance driven. Technology, informed by big data, is a key enabler of ADNOC’s transformation, he said. ADNOC is also exploring the potential use of block chain trading platforms to create maximum value from every barrel of oil it produces.
Highlighting the UAE’s long history as a stable, business friendly trading nation, H.E. Dr Al Jaber underlined ADNOC also enjoys a well-deserved reputation as a trusted and reliable partner and supplier. As such, he added, ADNOC stands ready to collaborate with everyone who shares its vision and its values and collectively seeks to realize the fullest potential, seize every market opportunity and take control of the future.