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Abu Dhabi's ADNOC attracts billions from foreign investors

01/15/2020 | 06:34am

Over the past three years, Abu Dhabi National Oil Company (ADNOC) has expanded its oil and gas business and quietly raised more than $19 billion in a variety of ways. See main story:

BlackRock, the world's largest fund manager, and other major financial institutions have invested in the company. ADNOC has also sold a stake in its pipeline infrastructure and refining businesses, listed its fuel distribution division and offered international oil companies long-term concession deals.

Below are some of the key deals the state oil company has announced since 2018, part of Abu Dhabi's plans to reform and modernize the economy and ADNOC, the emirate's crown jewel.

INFRASTRUCTURE DEAL

In 2019, U.S. investment firms BlackRock and KKR signed an agreement to invest $4 billion in ADNOC's midstream pipeline assets for a 40% stake in the business, ADNOC Oil Pipelines.

Singapore's sovereign wealth fund GIC will invest $600 million in the crude pipeline infrastructure for a 6% stake.

REFINING AND TRADING:

In 2019, Italy's Eni and Austria's OMV agreed to pay a combined $5.8 billion to take a stake in ADNOC's refining business and establish a new trading operation owned by the three partners. The deal, which expands ADNOC's access to European markets, furthers Eni's diversification away from Africa and gives OMV a downstream oil business outside Europe.

Under the agreement, Eni and OMV will respectively acquire a 20% and 15% share in ADNOC Refining, with ADNOC owning the remaining 65%.

ADNOC DISTRIBUTION IPO

IN 2017, ADNOC raised 3.1 billion dirhams ($851 million)through an initial public offering of its fuel distribution unit on the Abu Dhabi Securities Exchange. ADNOC Distribution sold 1.25 billion shares, or 10% of its share capital.

CONCESSIONS:

ADNOC signed a series of 40-year agreements with international energy companies for concessions.

France's Total was awarded a 20% stake in the Umm Shaif and Nasr concession and a 5% interest in the Lower Zakum concession. Total paid participation fees totaling of 5.3 billion dirhams ($1.44 billion)

PetroChina was granted 10% stakes in the two offshore concessions. It paid participation fees of 4.3 billion dirham ($1.17 billion) in total.

Eni won a 10% stake in Umm Shaif and Nasr and a 5% stake in Lower Zakum. Participation fees: 3.2 billion dirhams ($871.27 million).

Spain's Cepsa was awarded a 20% stake in the SARB and Umm Lulu offshore concession. Cepsa's participation fee was 5.5 billion dirhams ($1.5 billion).

A consortium led by India's Oil and Natural Gas Corp took a 10% stake in Lower Zakum. Participation fee: 2.2 billion dirhams ($600 million).

OMV won a 20% stake in the SARB and Umm Lulu concession. Participation fee: 5.5 billion dirhams ($1.5 billion).

Japan's INPEX was awarded a 10% stake in Lower Zakum, paying a 2.2 billion dirham ($600 million) participation fee. It also paid 920 million dirhams ($250 million) to extend its interests in the Satah and Umm Al Dalkh concession.

(Reporting by Rania El Gamal; Editing by Pravin Char)

© Reuters 2020
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