Page 5 - DMEA Week 07 2022

DMEA COMMENTARY DMEA

Following the expansion, Borouge will have chemicals manufacturer OCI listed a combined
a total PO production capacity of 6.4mn tpy, up 13.8% in their Fertiglobe JV on the Abu Dhabi
from the current 4.5mn tpy achieved through Securities Exchange (ADX) to raise $795mn and
the launch of Borouge 3 around nine years ago. achieved a valuation of $5.8bn.
Investors included Singapore’s GIC sovereign
Momentum wealth fund – which also picked up a share in the
News of plans to list a stake in Borouge comes as earlier oil pipelines lease – and Inclusive Capital
little surprise given the spate of IPOs and asset Partners which committed a combined $150mn
monetisation deals carried out by ADNOC in as ‘cornerstone investors’ before the final pricing
recent years that have netted the company tens was announced.
of billions of dollars and setting a trend being The IPO saw ADNOC and OCI reduce their
copied throughout the Gulf. Borouge would be individual shareholdings by 8% minus one share
the fourth of ADNOC’s affiliates to be listed. and 5.8% respectively, giving them 36.2% and
Over decades the company has become 50% plus one share respectively.
accustomed to allowing other parties minority Fertiglobe was formed in 2019 and comprises
control in upstream projects –as much as 100% the ammonia and urea assets of the two partners
in exploration work, which is reduced to around and companies EBIC, EFC, Sorfert, and Fertil
40% following a successful discovery with the (formerly ADNOC Fertilizers). At launch, the
majority transferred to ADNOC at that stage. partners said Fertiglobe would be the largest
However, this approach has been extended to export-focused nitrogen fertiliser platform glob-
the emirate’s downstream sector through a com- ally, and the largest producer in MENA with an
bination of listings and asset monetisation deals output capacity of 5mn tpy of urea and 1.5mn tpy
that will account for a significant chunk of the of merchant ammonia from facilities in Algeria,
company’s $127bn 2022-26 capital programme Egypt and the UAE. The timing of the listing was
to drive the achievement of plans to expand opportune given the recent surge in interest in
upstream oil production capacity from the cur- hydrogen and ammonia as a low-carbon alter-
rent 4mn barrels per day to 5mn bpd by the end native for industrial power.
of the decade. As ADNOC moves – like regional compet-
The company listed a 10% stake in ADNOC itors Saudi Aramco and QatarEnergy – to con-
Distribution in late 2017 to raise $851mn then trol more of its value chain, it can be expected to
sold a stake of 35% in ADNOC Refineries to continue expanding its affiliates and subsidiaries
Italy’s Eni (20%) and Austria-based, Abu Dhabi to maximise the value it can generate from each
state-affiliated OMV (which owns Borealis, barrel of oil or cubic metre of gas.
15%) for a total of around $5.8bn in early 2019. With oil prices rampant, the IPO fever has
These were followed by equally impressive deals swept through various sectors in the UAE and
for its oil and gas pipeline businesses. beyond and ADNOC is showing no signs of
In Q4 2021, the approach was extended let-up, with plans to sell bonds and potentially
to petrochemicals when ADNOC and Dutch list its logistics and shipping unit.™

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