State-owned giant has attracted $64.5 billion in international funding since 2016
Abu Dhabi National Oil Company (Adnoc) aims to step up foreign direct investments in the United Arab Emirates as it prepares to increase its oil production to 5 million barrels per day by 2030.
Khaled bin Mohamed Al Nahyan, the chairman of the Abu Dhabi Executive Office, on 13 July endorsed Adnoc’s plan “to continue expanding” its investor base to drive foreign investments into the UAE.
“Since 2016, Adnoc has welcomed some of the world’s most notable investors in a series of landmark transactions that delivered over $64.5 billion (237 billion Emirati dirhams)” in foreign direct investments, Abu Dhabi’s media office said in a statement on Thursday.
Leading National Oil Companies in the region, including Saudi Aramco and Adnoc, continue to widen their international investor base and have sold stakes in their key oil and gas assets, in line with their long-term strategies.
In recent years, Adnoc has divested equity in oil and gas exploration blocks to international investors, sold stakes in its oil and gas pipelines, roped in international energy giants for its key assets, including the giant Hail & Ghasha sour gas development, and carried out initial public offerings of some key business verticals, raising billions of dollars.
Oil and gas pipeline sales
In 2019, Adnoc sold a stake in Adnoc Oil Pipelines to a grouping of GIC, BlackRock, KKR and Abu Dhabi Retirement Pensions & Benefits Fund for $5 billion.
A year later, Adnoc sold a 49% stake in its gas pipeline business to group of investors for more than $10 billion.
The investors were Global Infrastructure Partners, Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board, NH Investment & Securities and Italy’s Snam.
Also in 2020, Adnoc agreed to lease out some of its key real-estate assets on a long-term basis in a deal with the US’ Apollo Global Management worth $5.5 billion.
Adnoc plans to unlock capital from its non-core assets, while focusing on its strategic investments in the emirate, industry experts said.
Ramp up plans
Aramco and Adnoc are investing heavily in scaling up their oil and gas production capabilities over the years, investing billions of dollars.
Adnoc alone is expected to spend $127 billion over the next four years on maintaining and expanding the production capacities of its fields.
It is expanding its oil production capacity to 5 million bpd by 2030, up from the current 4 million bpd.
A majority of incremental production in Abu Dhabi is expected to come from some of its largest offshore oilfields, which include Upper & Lower Zakum, Umm Shaif and Belbazem.
Strategic clean energy investments
Sheikh Khaled also gave directives to Adnoc “to create and expand on strategic partnerships to capitalise on opportunities in the evolving energy landscape”.
Earlier this year, Adnoc signed deals with compatriot Masdar and UK supermajor BP to develop hydrogen and technology hubs in the UK and the UAE in a major clean-energy push.
In the UK, Adnoc will take a 25% stake in the design stage of the H2Teesside blue hydrogen project, marking its first investment in the country.
H2Teesside plans to develop two 500-megawatt hydrogen plants by 2030. The project is set to begin operations in 2027.
Adnoc and BP will also carry out a joint feasibility study for a low-carbon hydrogen project in Abu Dhabi.
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