ADNOC ‘could list stake in fuel retail business in early 2018’

Banks have been mandated for an IPO in ADNOC Distribution, it was reported in July. (Reuters)
Updated 11 September 2017
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ADNOC ‘could list stake in fuel retail business in early 2018’

DUBAI: Abu Dhabi National Oil Co. (ADNOC) could list more than 10 percent of its fuel retail business by early 2018 and one or two more businesses later as part of a major shake-up, sources familiar with the matter said.
The listing for ADNOC Distribution, which manages petrol stations and convenience stores across the UAE as well as bunkering facilities and a lubricant plant, comes as Abu Dhabi and other Gulf states are privatizing energy assets in an era of cheap crude.
ADNOC said in July it planned to float stakes in some of its services businesses, but did not give details.
For ADNOC Distribution, Reuters reported in late July that banks had been mandated for the initial public offering (IPO), citing sources familiar with the matter.
“They are still working on it, there may be other services (to be listed) but it will not be that fast,” said one source.
ADNOC may in future choose to float one or maximum two more businesses such as its drilling arm, National Drilling Company, or energy infrastructure if the IPO of ADNOC Distribution proves successful, several sources familiar with the firm’s plans said.
The partial privatization plan aims to make ADNOC a more competitive and commercially-focused firm, the sources said.
“The value of this is when you take a company through the IPO process you make it efficient, you optimize it, it becomes a better company as a whole,” one said.
The listing of the fuel-retailer business is likely to be on the Abu Dhabi stock exchange and could happen early next year, several sources told Reuters.
An ADNOC spokesman said: “As announced on July 10, ADNOC is expanding its partnership model and creating new investment opportunities across all areas of its value chain.”
“Central to ADNOC’s new approach will be the more active management of its portfolio of assets and businesses. ADNOC is therefore considering the potential IPO of minority stakes of some of its services businesses which have attractive investment and growth profiles,” the spokesman said.
Since the appointment of Sultan Al-Jaber as ADNOC’s chief executive last year, ADNOC — dubbed “a sleeping energy giant” by one source — has launched a major shake-up.
A sharp drop in crude prices since mid-2014 has forced the oil industry to cut costs and look for ways to boost efficiency.
The transformation of ADNOC, a traditionally conservative firm, is also seen as part of an economic reform drive led by Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan.
“With (oil) prices not expected to increase much and production constrained by OPEC, Abu Dhabi needs to find alternative ways to get value out of its NOC (national oil company),” said Robin Mills, chief executive of UAE-based consultancy Qamar Energy.
“The approach is rather different from Aramco’s, with more focus on subsidiary IPOs, JVs (joint ventures), and bringing in outside financing into select assets. ADNOC has of course always had more attention on partnerships than most other NOCs via the upstream JVs.”
Saudi Arabia plans to list 5 percent of its national oil company Aramco by next year.
ADNOC has already begun consolidating the operations of two oil companies into a new entity, and a merger of three of its shipping and marine services businesses is expected to be completed by the end of the year. It is looking to set up its own trading unit.
ADNOC produces some 3 million barrels of oil per day, or around 3 percent of global production. It also produces more than 9.8 billion cubic feet of raw gas per day, placing it among the largest energy producers in the world.
— Reuters


Rolls-Royce unveils hybrid flying taxi at Farnborough

Updated 17 July 2018
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Rolls-Royce unveils hybrid flying taxi at Farnborough

  • Rolls-Royce hopes to manufacture a prototype version of its electric vertical take-off and landing vehicle within the next 18 months
  • Rolls-Royce is also researching an all-electric product but that is not as advanced as the EVTOL offering

FARNBOROUGH, United Kingdom: British engine maker Rolls-Royce revealed plans this week to develop a hybrid electric vehicle, dubbed the “flying taxi,” which takes off and lands vertically and could be airborne within five years.
The London-listed aerospace giant, which is based in Derby in central England, showed off the plans at the Farnborough Airshow for the first time, as other players also rush into the market segment.
Rolls said it hoped to manufacture a prototype version of its electric vertical take-off and landing (EVTOL) vehicle within the next 18 months, and could potentially take to the skies in the early 2020s.
The Rolls-Royce EVTOL plane will seat four or five people, with a flying range of 500 miles (805 kilometers) and a top speed of 200 miles per hour.
“In this market, you will see something like this flying within three to five years, and we will demonstrate the system in two years,” said Rob Watson, head of Rolls-Royce’s electrical team.
“At the end of next year we will be flight ready,” he said at the group’s Farnborough chalet.
The hybrid vehicle, which has so far cost single-digit millions of pounds to develop, will use a traditional gas turbine engine with an electrical system wrapped around it.
Rolls-Royce is also researching an all-electric product but that is not as advanced as the EVTOL offering.
“There is an emerging market for all-electric planes but we believe that you need a level of requirement that an all-electric system cannot really provide today,” Watson said.
“So, all-electric is the way to hop around within a city, but if you want to travel 200 or 300 miles, if you want to run London to Paris, then you are going to want to run something that will give you that range.
“So we think you will see hybrid propulsion systems starting to make this market.”
Rolls is not alone in the hybrid “flying taxi” marketplace.
Other companies researching the sector include US taxi-hailing company Uber, the Google-backed Kitty Hawk project, Lilium Aviation in Germany, Safran in France, and Honeywell in the United States.
The aerospace sector’s push into electric propulsion has drawn comparisons with the automotive industry, where electric cars are gaining ground in terms of popularity and performance.
“Think of it like the car industry. Historically everybody had an internal combustion engine. over time you add more electric capability to it and then you start to see electric cars,” added Watson.
“In the same way, we are introducing a hybrid propulsion system into this market because we think it gives you that range and capability.”
David Stewart, aviation and aerospace adviser and partner at Oliver Wyman, said that the aerospace sector was facing pressure to become more environmentally friendly.
“I think that electrical propulsion is a potential disruptor to the way things are powered,” said Stewart, who will speak at Farnborough on Tuesday.
“We are quite a long way for electrical power to be a replacement for kerosene, but never say never.”
He cautioned that Rolls-Royce’s flying taxi concept was in reality a development platform to test the new technology.
The real market opportunity will likely be a scaled-up version of 10-15 seats that can serve a wider variety of applications, according to Stewart.
Watson added: “Over time you’ve got more electrical capability for bigger and bigger aircraft — and that’s really what we are thinking about today.
“We are learning today about the technology that we will need tomorrow.”