Page 4 - MEOG Week 42

MEOG COMMENTARY MEOG

ADNOC keeps busy

The Abu Dhabi oil firm has continued its recent spate of activity, setting up trading arms,
buying crude tankers and divesting more of its holding in its gas pipeline subsidiary

UAE ABU Dhabi National Oil Co. (ADNOC) has 925,000 bpd.
maintained high levels of activity across the UAE Minister of Energy and ADNOC Group
value chain throughout 2020 as it seeks to diver- CEO H.E. Sultan al Jaber said of the formation of
WHAT: sify operations and revenue streams. the new trading divisions: “Our steadfast focus is
ADNOC has expanded its While a new trading arm has become an on providing a better service to our customers,
capabilities as it seeks to important strategic addition to the company, while also stretching the margin from every bar-
exert greater control over plans to invest in renewables and hydrogen show rel of oil that we produce, refine and trade. Our
the hydrocarbon value that very few options are not on the table when move into trading supports both of these goals.”
chain. it comes to maintaining relevance as oil and ADNOC said that its “marketing arm is mov-
gas come under mounting pressure amid weak ing from a supplier that customers historically
WHY: demand and growing environmentally sensitive collected products from, to a more customer and
The company is keen to sentiment. market-centric, shipping and integrated logis-
maintain market share tics, storage and trading organisation.”
and sees the midstream Trading The parent firm owns storage capacity in the
as a vital component in In September, ADNOC announced the forma- UAE, Japan and India and last year acquired a
keeping its oil flowing to tion of two new subsidiaries: ADNOC Global 10% stake in VTTI, which is undertaking an
key consumer markets. Trading, a joint venture with Austria’s OMV and expansion of its facilities in the eastern emirate
Eni of Italy, will focus on refined products, while of Fujairah.
WHAT NEXT: the wholly-owned ADNOC Trading will focus
ADNOC has continued to on crude oil. Storage release
divest stakes in key state The news follows the 2019 agreement with Storage has been an area of interest for ADNOC
assets and infrastructure, its European partners to establish a physical for some time and the firm has been strategic in
and its success makes it and derivatives trading JV incorporated at its selection of partners.
the blueprint for large oil Abu Dhabi Global Markets for exports of the In early 2019, it revealed that work was
firms around the world. latter’s refineries’ products, which account for underway under a $1.2bn engineering, procure-
around 70% of output, with the rest deployed ment and construction (EPC) contract awarded
domestically. last year to South Korea’s SK Engineering & Con-
That deal came as Eni and OMV acquired struction for a 42mn barrel underground crude
interests of 20% and 15% respectively in storage facility at Fujairah. The eastern emirate
ADNOC Refining for a combined total of has the key advantage of being located outside
around $5.8bn, based on a valuation of around the crowded Strait of Hormuz.
$19.4bn, which covered the 837,000 barrel per An agreement to store up to 6.29mn barrels at
day Ruwais refining complex in the Western the Kiire oil terminal in southern Japan has been
Region and an ageing 85,000 bpd facility near in place since 2009. Meanwhile, a memorandum
Abu Dhabi City, as well as a 1,900-km pipeline of understanding (MoU) was signed in Novem-
network. ber with Indian Strategic Petroleum Reserves
In October last year, ADNOC said that Ltd (ISPRL) to consider taking space in the new
it wanted to expand ADNOC Refining and Padur cavern in the southern state of Karnataka.
increase capacity to 1.5mn bpd from the current ISPRL completed the process of filling a 5.86mn

P4 www. NEWSBASE .com Week 42 21•October•2020