Adnoc seals $5.8bn deal with Eni, OMV

Abu Dhabi / WAM

His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, witnessed, on Sunday, the signing of two new strategic equity partnerships between the Abu Dhabi National Oil Company (Adnoc), Eni and OMV covering both Adnoc Refining and a new trading joint venture, which will be jointly established by the three partners.
During the signing, His Highness commended the new trading venture with the three partners, adding that the UAE “provides solid and reliable foundations as an international investment destination for global partners.”
In one of the largest ever refinery transactions, Eni and OMV will acquire 20 percent and 15 percent shares in Adnoc Refining respectively, with Adnoc owning the remaining 65 percent. The agreement values Adnoc Refining, which has a total refining capacity of 922,000 barrels per day, and which operates the fourth largest single site refinery in the world, at an enterprise value of $19.3 billion.
As a further part and condition of this agreement, the partners will also establish a trading joint venture, in which Eni and OMV will own 20 percent and 15 percent of the shares respectively. Proceeds to Adnoc from the sale are estimated to be $5.8 billion, subject to completion adjustments. The transaction reflects the scale, quality and growth potential of Adnoc Refining’s
assets, coupled with an advantageous location from which to supply markets in Africa, Asia and Europe.
Eni and OMV have strong track records in maximising value from advanced, complex refinery operations and bring to the partnership extensive operational and project management experience and expertise.
Further value will be created from the new global trading joint venture, which, once established, will be an international exporter of Adnoc Refining’s products, with export volumes equivalent to approximately 70 percent of throughput. Domestic supply within the UAE will continue to be managed by Adnoc.
Dr Sultan Al Jaber,, Minister of State and Adnoc Group CEO, said, “We are delighted to partner with Eni and OMV in our refining business and the new trading company. Such partnerships follow our leadership’s wise guidance to unlock and drive greater value across our business. These innovative partnerships will support our ambition of becoming an international downstream leader with the flexibility to respond quickly to shifting market needs and dynamics. They will help enable our objective of unlocking even more value from every barrel of oil we produce.”
“Working closely with our partners, we will also deliver further efficiencies across our operations and improve asset and business performance,” he said.
Supported by the high cash flow generation capacity of Adnoc Refining, the three partners have committed to substantial growth plans for Adnoc Refining in the short to mid-term. The partners have also agreed to a comprehensive capital allocation framework to achieve self-funded growth, paired with an attractive dividend policy.
These important new agreements build on Adnoc’s expanded approach to long-term partnerships and the more proactive management of its portfolio of assets, as well as its track-record of successful partnerships over the last 50 years in both upstream and downstream. The partnerships will support Adnoc as it evolves to become a leading global downstream player, by expanding
refining and petrochemical operations at Ruwais and securing greater downstream global market share, as outlined during the company’s Downstream Investment Forum, in May 2018.