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Oil, Gas, Petrochemical and Energy Field Specialized Channel
Oil, Gas, Petrochemical and Energy Field Specialized Channel
Oil, Gas, Petrochemical and Energy Field Specialized Channel

UAE's ADNOC in Advanced Talks to Sell Refinery Stakes

Adnoc began a wide-ranging shake-up in 2016 to tackle competition from new producers such as US shale firms.

 

State-owned Abu Dhabi National Oil Co (ADNOC) is in advanced talks with more than one potential buyer, including Italy's ENI, as it prepares to sell minority stakes in its refining business, two sources familiar with the matter said.

Adnoc began a wide-ranging shake-up in 2016 to tackle competition from new producers such as US shale firms. It listed 10 per cent of its fuel distribution business last year and aims to expand its downstream business abroad.

The company also started a sale process for a stake in its $20 billion refining business, which the sources said it was likely to split between two or more parties.

One said that Adnoc would favour companies it already has partnerships with, including ENI and Austrian oil and gas group OMV.

OMV works with Adnoc on a number of projects, including a 40-year agreement for a 20 per cent stake in the SARB and Umm Lulu offshore oil concession. ENI has a 10 per cent stake in its Umm Shaif and Nasr offshore oil concession and a 5 per cent stake in Lower Zakum.

"This strategy would give Adnoc the chance to bring in these companies' money and expertise without having a dominant partner," the source said.

A second round of offers is expected to be presented as soon as next week, when the Gulf returns from a religious holiday, both sources said.

"Adnoc...is exploring multiple opportunities that span Adnoc's entire value chain," an Adnoc spokesman said.

"To date we have received significant interest from the market, (from both) new and existing partners. We will update the market in due course," he added.

Adnoc also has partnerships with France's Total and PetroChina, among others.

An ENI spokesman said the company does not comment on market rumours. OMV was not immediately available to comment.

ENI, the biggest foreign oil producer in Africa, is looking to build its presence in the Middle East to diversify risk and take advantage of business opportunities in the oil-rich region.

One of the sources said it is using US investment bank Morgan Stanley to help with the offer for Adnoc's stake.

Morgan Stanley declined to comment.

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