Abu Dhabi National Oil Company (Adnoc) on Monday announced a new strategic partnership with OCI, headquartered in the Netherlands.
The partnership will see Adnoc combine its fertilizer business, Adnoc Fertilizers, into OCI’s Middle East and North Africa (MENA) nitrogen fertilizer platform to form a new joint venture.
The JV will become the largest export-focused nitrogen fertilizer platform globally and the largest producer in the MENA region with a production capacity of 5 million tons of urea and 1.5 million tons of sellable ammonia, a statement said.
It added that annual revenues for the combined entity are $1.74 billion, based on 2018 pro forma figures. Adnoc and OCI will own a 42 percent and 58 percent stake in the JV respectively.
In conjunction with this joint venture, Adnoc Fertilizers has also signed a new long-term gas supply agreement with Adnoc, which will provide its facilities in Ruwais with the required feedstock for its operations based on a competitive pricing formula.
The JV will be based in Abu Dhabi with Nassef Sawiris assuming the role of CEO of the JV, alongside his current role as CEO of OCI.
Dr Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc Group CEO, said: “We are extremely pleased to have created this new joint venture with OCI who are a world leader in nitrogen fertilizers and share our ambition and vision to grow our new combined fertilizer business. Pooling our assets and capabilities is a value enhancing step for both companies, allowing us to leapfrog competitors to become the top nitrogen export platform globally. It will also enable us to access new markets, benefitting both existing and new customers.”
Sawiris added: “This partnership creates a first-of-its-kind export platform with best-in-class cash conversion metrics. I believe that this platform has significant potential for future growth and value creation, with the support and under the guidance of its two key shareholders”.
The transaction is expected to close in the third quarter of 2019, subject to legal and regulatory conditions.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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