Partnerships and IPOs are helping to transform Abu Dhabi’s oil giant ADNOC

BlackRock, Apollo, KKR, Brookfield and many other big asset management companies have already partnered with ADNOC (Abu Dhabi National Oil Company) through a series of billion-dollar deals.

Four ADNOC subsidiaries have also successfully listed on the Abu Dhabi Securities Exchange (ADX) as part of its ongoing transformation. The most recent was Borouge, a petrochemical joint venture which became the largest IPO on the ADX earlier this month.

The ADNOC group of companies sold bonds in foreign markets for the first time, tapping a new capital market segment that has generated long-term funding and improved its capital structure.

All these moves have helped attract new capital and boost the emirate’s exchange, stated the special report from Gulf Intelligence – ‘ADNOC’s transformation ignites global appetite for UAE capital markets’.

The state-owned company is also seeding a new industrial cluster up the coast from Abu Dhabi called TA’ZIZ. This is attracting new partners and millions of dollars in investments in petrochemicals manufacturing, which promises to boost the wider economy.

“I see possibilities of partnerships at every turn,’’ Dr. Sultan Ahmed Al Jaber (below), ADNOC’s chief executive officer and managing director said last November.

The global oil industry needs to invest more than $600 billion (AED2.2 trillion) a year until 2030 to meet energy demand and “we require a new model of partnership across the industry’’ to unlock opportunities, he said.

Some of the company’s initiatives aimed at unlocking value have led to first-of-their-kind deals in the Middle East. In 2019 ADNOC announced a pipeline transaction with BlackRock, the world’s biggest asset manager, and KKR, that helped it generate about $5 billion of initial cash.

ADNOC, the world’s 12th largest oil compnay based on production, has generated some $65 billion in foreign investment from various joint ventures and financial initiatives since 2016, according to the report.

Several of these have had ramifications for the wider United Arab Emirates economy, the Arab world’s second-biggest after Saudi Arabia.

Since being founded in 1971, the company has been responsible for developing Abu Dhabi’s oil and gas reserves, the world’s sixth-biggest, with a significant exploration and development programme.

As pressure on the energy industry grew following the plunge in global oil prices in 2015, ADNOC drew up an expanded partnership model to more actively manage its businesses, unlock value and improve performance. These now form a part of its ambitious 2030 Strategy.

This strategy includes increasing crude oil production capacity, delivering gas self-sufficiency, expanding downstream industries such as petrochemicals and developing a more commercial attitude to new partner relationships.