ADNOC will retain 65% stake, while Eni and OMV will hold 20% and 15%, respectively in ADNOC Refining, which has a refining capacity of more than 922,000 barrels per day of crude


Image: Signing of the ADNOC Refining deals in January 2019. Photo: courtesy of Abu Dhabi National Oil Company.

The Abu Dhabi National Oil Company (ADNOC) has completed two separate deals with Eni and OMV, totaling $5.67bn (£4.67bn) for stakes of 20% and 15%, respectively in ADNOC Refining.

As per the deals announced in January 2019, Eni’s final cash price is around $3.24bn (£2.67bn), while Austria-based OMV’s price for the stake will be $2.43bn (£2.0bn).

Following the two transactions, ADNOC Refining has an enterprise value of around $19.3bn (£15.91bn). The downstream company, which was formed in 1999 as a separate entity, is engaged in crude oil and condensate refining, and supply of petroleum products.

ADNOC Refining owns refineries in Ruwais and Abu Dhabi

ADNOC Refining has a refining capacity of more than 922,000 barrels per day of crude at its refineries located in Ruwais and Abu Dhabi in the UAE. The capacity is expected to go up with ADNOC undertaking a $3.1bn (£2.56bn) upgrade of the Ruwais oil refinery through the Crude Flexibility Project (CFP), to add crude processing flexibility and free up more Murban grade crude.

ADNOC, which holds remaining stake of 65% in the refining company, will set up a new trading joint venture alongside Eni and OMV with similar stakes. The partners are expected to begin trading from next year once all the required processes, procedures and systems are ready.

Eni and OMV will help ADNOC with their expertise and operational experience to fast track the development of the trading joint venture, which will be an international exporter of ADNOC Refining’s products. Almost 70% of production from the refining company will be exported.

For the Italy-based Eni, the transaction marks its entry in the UAE downstream sector, while boosting its global refining capacity by 35%. It is in line with the Italian oil and gas company’s strategy of making its overall portfolio more diversified geographically and more balanced across the value chain.

For OMV, the transaction expands its refining capacity by 40% and its olefin capacity by 10%. Furthermore, it will help the Austrian oil and gas company set up a strong integrated position in Abu Dhabi along the value chain, stretching from upstream production to refining and trading, and petrochemicals.