ADNOC, Mubadala to jointly explore global growth opportunities

ADNOC, Mubadala to jointly explore global growth opportunities
Published: 15 November 2018 - 5 a.m.
By: Martin Menachery

ADNOC and Mubadala Investment Company (Mubadala) signed a framework agreement to explore together potential global growth opportunities that build on Mubadala's diverse portfolio of refining and petrochemicals assets and support ADNOC's international downstream investment ambitions.

The agreement was signed by Abdulaziz Alhajri, director of ADNOC’s Downstream Directorate, and Musabbeh Al Kaabi, CEO of Petroleum and Petrochemicals at Mubadala, during the Abu Dhabi International Petroleum Conference and Exhibition (ADIPEC) being held in Abu Dhabi. The signing was witnessed by Dr Sultan Ahmed Al Jaber, UAE minister of state and ADNOC Group CEO, and Khaldoon Al Mubarak, Group CEO and managing director of Mubadala.

Alhajri said: “This agreement is a natural evolution of the close relationship between ADNOC and Mubadala. It will ensure that, in partnership, we continue to maximise value from our hydrocarbon resources, in line with the UAE leadership’s wise directives of stretching the value of every barrel of oil we produce. We look forward to jointly identifying and securing mutually beneficial value enhancing opportunities and securing more effective market access for our products.”

Al Kaabi said: “Mubadala has an extensive and successful refining and petrochemical portfolio, which already has a number of strong partnerships with ADNOC.With the same shareholder, it was a very natural conclusion to reach that we should extend our collaboration into the global arena by pooling our technology, market knowledge, access to feedstock and operating experience.”

Mubadala has successfully developed a diverse portfolio of refining and petrochemicals assets, including CEPSA, OMV, Cosmo Oil, PARCO, NOVA Chemicals and Borealis. The refining operations, in this portfolio, are renowned for their technical and commercial excellence and are net buyers of crude, while the petrochemical operations include leading proprietary technologies for production of polyolefins and other products.

As part of the framework agreement, ADNOC and Mubadala will explore the potential for the processing of crude oil and other hydrocarbons supplied by ADNOC, as well as potentially utilising technologies owned by Mubadala with product offtake by other ADNOC companies. This end-to-end investment model allows for the UAE to not only assure long-term security of its hydrocarbon resources but allows for margin capture along the value chain.

ADNOC and Mubadala have a growing record of successful partnership, working together to maximise value from Abu Dhabi’s oil and gas resources. Borealis, 67% owned by Mubadala, owns a 40% share in Borouge, which is ADNOC’s joint venture with Borealis. In February 2018, ADNOC awarded CEPSA, wholly-owned by Mubadala, a 20% stake in the SARB and Umm Lulu offshore concessions, and, in May, ADNOC and CEPSA signed a project development agreement for a new, world-scale linear alkyl benzene facility in ADNOC’s refining and petrochemicals complex in Ruwais, UAE.

Meanwhile, in April, ADNOC awarded OMV a 20% stake in Abu Dhabi’s SARB and Umm Lulu offshore concession. OMV, an Austrian integrated oil and gas company, is part-owned by Mubadala.

ADNOC has embarked on the execution of its downstream strategy, which includes a $45bn downstream investment programme that will see the Ruwais Industrial Complex upgraded to significantly increase its flexibility and integrated capabilities to produce greater volumes of higher-value refined and petrochemical products and significant expansion internationally through ADNOC International.

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