ADNOC’s new trading unit to play ‘critical role’ in expansion plans

ADNOC logos on display at GASTECH, in Chiba, Japan. ADNOC has set up a new unit for trading crude oil and refined products as part of its strategy to maximize returns on every barrel of oil produced and drive revenue from new business streams. (Reuters)
Updated 23 April 2018
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ADNOC’s new trading unit to play ‘critical role’ in expansion plans

  • ADNOC CEO Sultan Ahmed Al Jaber: “As ADNOC grows and expands its upstream and downstream businesses, we will produce more products, and in turn, our marketing, sales and trading function will play an even more critical role.”
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“Engaging in non-speculative trading will allow us to maximize value from our domestic and, over time, international downstream operations.”

LONDON: Abu Dhabi National Oil Company (ADNOC) has set up a new unit for trading crude oil and refined products as part of its strategy to maximize returns on every barrel of oil produced and drive revenue from new business streams.

“As ADNOC grows and expands its upstream and downstream businesses, we will produce more products, and in turn, our marketing, sales and trading function will play an even more critical role,” said Sultan Ahmed Al Jaber, UAE minister of state and ADNOC Group CEO.



“Engaging in non-speculative trading will allow us to maximize value from our domestic and, over time, international downstream operations,” added Al Jaber.

The news comes as ADNOC is pushing forward with its plans to expand its downstream business in anticipation of the growth in the global petrochemicals sector.

“Looking out over the next two decades, we anticipate the sharpest growth within the energy sector will be petrochemicals, with demand forecast to climb 150 percent by 2040,” Al Jaber said.

“To capitalize on this opportunity and make ADNOC more resilient against possible price volatility, our goal is to become a major global downstream player, creating a strong pull for our products, combined with the flexibility to respond quickly to shifting market needs,” he said in an official statement.

ADNOC announced last November it was planning to invest more than 400 billion dirhams ($109 billion) over the next five years to increase its domestic refining, gas and petrochemicals businesses as well as expand its international downstream operations.

The firm is expected to set out its plans for downstream growth at an investment forum being held in Abu Dhabi in May.

ADNOC’s 2030 strategy — approved in 2016 — aims to increase petrochemical production from 4.5 million tons per year in 2016 to 11.4 mtpa by 2025.


Despite efforts to stop lira fall, Turks still worried

Updated 26 May 2018
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Despite efforts to stop lira fall, Turks still worried

ANKARA: After the embattled Turkish lira weakened against the US dollar this week, Turks remain troubled over the economy despite the government’s reassurances.
The lira’s drama worsened on Wednesday when Japanese investors sold Turkish assets, after comments by President Recep Tayyip Erdogan spooked investors earlier in May.
The lira hit 4.92 against the dollar before paring back some of its losses on Wednesday after an emergency central bank interest rate hike, but for many it’s not enough.
In a busy bureau de change on one of Ankara’s popular streets, thoughts turn to the worsening situation and fears that the country is already in a “currency crisis,” as experts at Commerzbank have described it.
During AFP’s visit, dozens came in to change their liras into gold, dollars and euros.
Ali Yilik indicated he was not convinced by Ankara’s reassurances as he changed his money into dollars for work.
“Who wouldn’t be worried about the exchange rate (situation)? This is not something that happens in normal conditions. It is extraordinary,” Yilik, who sells construction material, said.
Ali’s son Yahya Yilik, who is the manager at Tunali Doviz, said more Turks were coming in buying euros and dollars amid worries that the lira would fall further.
“They think the lira will keep losing value,” Yilik told AFP, adding that interest rate increases were a “temporary measure.”
In the past “one or two weeks,” the manager said the center had sold more foreign exchange than those wanting to buy lira.
The fall followed Erdogan comments during his UK visit mid-May when he indicated he wanted a greater say in monetary policy if he won in June 24 polls. This then raised concerns over economic policy becoming more unpredictable.
Student Necdet Guven was in the bureau de change to obtain dollars ahead of a trip to the US in mid-June but said he was “really worried” about the economy.
“Because everyday our economy gets worse. In the past, Turkey used to be among the top countries for agriculture and livestock, but now we import meat from Serbia and straw from Russia,” Guven lamented.
“We are not that developed a country in terms of industry,” he added, saying he believed Turkey had the potential to develop the economy further.
The lira appeared to show no signs of dramatic improvement and was at 4.70 against the dollar on Friday. In the past month, the lira has lost over 16 percent of its value against the greenback.
In a bid to ease concerns, Deputy Prime Minister Mehmet Simsek — an ex Merrill Lynch economist trusted by markets — on Friday said the central bank “would do whatever is necessary” during an interview with NTV broadcaster.
“There is no question of taking steps back on either the independence of the central bank or the rule-based market economy,” Simsek vowed.
But not everyone looked at the situation pessimistically.
Orhan Albayrak said the euro and dollar’s value was increasing because of “outside forces’ economic pressure on Turkey,” adding there was “an artificial rise.”
But Albayrak, a wholesaler, was hopeful the lira’s fortunes would improve toward the date of the presidential and parliamentary elections.
“But when there are five, 10 days to the elections, I believe this increase will reverse,” he added.
Albayrak said the three percent key rate rise had some impact, but believed the lira could improve and “reach 4.2, 4.3” with further central bank moves supported by the government.
After the rate hike on Wednesday evening, Erdogan insisted Turkey would adhere to the global governance principles on monetary policy in the new system post-election.
But, Erdogan added he would not let those principles “finish our country off.”