We want to open a dialogue with both new and existing partners as we begin this next stage of our transformation into a more commercially minded and performance-driven company.

H.E. Dr. Sultan Ahmed AL JABER UAE Minister of State and ADNOC Group CEO ADNOC

Power forward

December 20, 2017

Dr. Sultan Ahmed Al Jaber, minister of state and ADNOC CEO, talks to TOGY about his vision for the company and his strategy to reshape it to compete in the modern hydrocarbons market. In November 2017, Crown Prince Mohamed bin Zayed Al Nahyan said ADNOC was planning capital spending of around USD 109 billion over the following five years. About 60% of the funds will be devoted to upstream expansion, while the remaining 40% will be directed towards an expansion of the company's downstream capacity, including overseas facilities.

• On upstream: “In upstream, we will further develop and grow a leading turn-key drilling company. We will also continue to develop our upstream concessions with value-adding partners that may also wish to strategically partner with us in other parts of our value chain.”

• On midstream: “In midstream, we are creating a new, innovative energy infrastructure venture to both generate value and optimise our assets. This new venture, for example, could include the bundling together of select ADNOC logistical infrastructure assets such as oil, gas or refined products pipelines and storage facilities.”

• On downstream: “We are also opening up our downstream business to create new investment and partnership opportunities across our portfolio of refinery and petrochemicals assets. These new ventures will bring in partners to improve integration, realise synergies and expand both our technological capability and output to meet the rising global demand for petrochemical products, especially in Asia.”

• On investment: “Any IPO would support the growth and expansion of both the UAE’s private sector and equity capital markets and would allow the public and other investors to invest alongside ADNOC and benefit from the future growth of these assets.”

Most TOGY interviews are published exclusively on our business intelligence platform TOGYiN, but you can find an abridged version of our conversation with Dr. Al Jaber below.

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With the global energy industry changing rapidly, a key challenge for us – and our peers – is to think and act smarter. Shifting global trends are creating an energy landscape where new rules of engagement are necessary. In this new energy market, we must adopt more creative strategies and more flexible business models to capture growth.

NEW PARTNERS: Over the last few months, we have developed a new approach to partnerships and identified several highly compelling co-investment opportunities across our value chain – from the upstream to the downstream.
This tailored approach to value creation will enhance our ability to capitalise on the key trends in the industry as well as leverage the unique competitive advantages we possess. These include our flexible and open operating model, our 45 years of successful energy partnering and experience, our robust financial strength and stability, and the UAE’s investor-friendly environment and reputation.
This reinvigorated partnership model will also enable us to efficiently and actively manage our asset portfolio and capital structure.
Crucially, these new types of partnerships will help optimise our operational and financial performance at both the ADNOC Group and asset level, and they will help secure access to target markets and the new centres of global demand. They will bring technological expertise and foster better knowledge sharing between ADNOC and our partners, as well as enable the co-development of cutting-edge intellectual property and technology.

ACROSS THE VALUE CHAIN: In upstream, we will further develop and grow a leading turn-key drilling company. We will also continue to develop our upstream concessions with value-adding partners that may also wish to strategically partner with us in other parts of our value chain.
In midstream, we are creating a new, innovative energy infrastructure venture to both generate value and optimise our assets. This new venture, for example, could include the bundling together of select ADNOC logistical infrastructure assets such as oil, gas or refined products pipelines and storage facilities.
We are also opening up our downstream business to create new investment and partnership opportunities across our portfolio of refinery and petrochemicals assets. These new ventures will bring in partners to improve integration, realise synergies and expand both our technological capability and output to meet the rising global demand for petrochemical products, especially in Asia.

INVESTMENT INTRODUCTION: As part of this more proactive approach to the management of our portfolio of assets and businesses, we are also considering the IPO of minority stakes in some of our ADNOC service businesses, which have attractive investment and growth profiles.
Any IPO would support the growth and expansion of both the UAE’s private sector and equity capital markets and would allow the public and other investors to invest alongside ADNOC and benefit from the future growth of these assets. ADNOC would continue to be a committed, majority shareholder in any businesses that are listed. And just to be clear, we have no plans for an IPO at the ADNOC Group holding level. ADNOC will remain fully owned by the government of Abu Dhabi.

JOIN TOGETHER: We believe this new, expanded partnership approach marks a step change in the future growth of ADNOC. It signals the beginning of the next exciting phase of ADNOC’s ongoing transformation and it presents a unique opportunity for both new and existing partners to work alongside us and benefit from our mutual growth – from IOCs, NOCs and large trading houses to international pension funds, private equity investors and global infrastructure specialists.

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