UAE’s ADNOC signs deal with Spain’s Cepsa for new LAB facility

The new facility will be located at ADNOC's Ruwais refining and petrochemicals site. (Reuters)
Updated 14 May 2018
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UAE’s ADNOC signs deal with Spain’s Cepsa for new LAB facility

  • Agreement follows MoU signed in November
  • Company to invest $45 billion over the next five years to expand its refining and petrochemicals operations

Abu Dhabi National Oil Company (ADNOC) has signed a project development agreement with Spain’s Cepsa for a new linear alkylbenzene (LAB) facility in ADNOC’s Ruwais refining and petrochemicals complex.
The LAB facility, which can be used in the production of detergents, paints and cosmetics, is among a number of initiatives taken by ADNOC as looks to expand its refining and petrochemicals operations, it said in a statement on Monday.
The national oil company plans to invest $45 billion over the next five years to expand its refining and petrochemicals operations, it said on Sunday.
The centerpiece of ADNOC’s strategy is the Ruwais industrial complex, which ADNOC wants to turn into the largest integrated refining and petrochemicals complex in the world.
The LAB agreement follows the signing last November of a memorandum of understanding (MoU) between ADNOC and Cepsa to evaluate the setting up of a LAB facility in Ruwais, ADNOC said.
After completing a feasibility study, the LAB project will now move to the Front End Engineering Design (FEED) stage, ADNOC said.
“The LAB manufacturing facility will be fully integrated within the ADNOC refining complex, taking feedstocks of kerosene and benzene and benefiting from the suite of utilities and services of the Ruwais complex,” ADNOC said.
“The facility is expected to have a production capacity of 150,000 tons per year of LAB upon completion.”
Striving to become a global player in the downstream sector, the state oil giant wants to double its refining capacity and triple petrochemicals output potential by 2025 as it looks to capture new growth markets, ADNOC’s Chief Executive Sultan Al-Jaber told Reuters in an interview on Saturday.
ADNOC plans to expand refining and petrochemical operations at Ruwais by adding a third refinery to boost capacity by 600,000 barrels per day (bpd) by 2025, lifting total refining potential to 1.5 million bpd.


Emirates NBD profit surges on asset sale and forex gains

Updated 17 July 2019
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Emirates NBD profit surges on asset sale and forex gains

  • Dubai’s largest bank reports 80 percent rise in net profit for second quarter

DUBAI: Emirates NBD, Dubai’s largest bank, reported an 80 percent rise in second-quarter net profit helped by the sale of a stake in Network International and strong non-interest income on foreign exchange gains.

The result included a gain of 2.1 billion dirhams ($572 million) from the sale of a stake in digital payment provider Network International in an initial public offering in London in April.

The earnings showed that top banks in the UAE have still withstood strains from a sluggish economy and a property downturn in Dubai.

Second-quarter net profit jumped 80 percent to 4.74 billion dirhams. EFG Hermes had expected a net profit of 4.06 billion in the second quarter.

The bank said net interest income rose 6 percent in the second-quarter from a year earlier, as growth in assets offset a drop in net interest rate margins.

Non-interest income surged 23 percent, helped by gains in foreign exchange income and investment banking activities.

Provisioning for bad debts more than doubled to 656 million dirhams in the second quarter from a year earlier.

The bank said the cost of risk had increased in 2019 to a more normalized level from relatively better credit quality conditions in 2018.

Cost of risk reflects the price a lender pays to manage its risk exposure. In 2018, Emirates NBD signaled that it expected cost of risk to revert to a long-term level of 80-100 basis points from the 63 basis points seen in 2018.

“The increased cost of risk of 82 basis points in H1 2019 is a result of an expectation of a reversion of credit quality to more normalized levels from the benign conditions in 2018, coupled with the expectation of lower write-backs and recoveries,” it said.

Credit-rating agency Moody’s had warned earlier this year provisioning charges for top banks in the UAE will increase in 2019 owing to pressure in the property and the retail sectors.

The Dubai lender said its net profit surged 49 percent in the first half of the year. “Core operating profit advanced 8 percent compared to the first half of 2018, helped by loan growth, higher foreign exchange income and increased investment banking activity,” the bank’s chief executive Shayne Nelson said in a statement.

Nelson said that the bank continued to make progress on the acquisition of Turkey’s Denizbank and expects this transaction to close in the third quarter of 2019.

Emirates NBD said in April that it was buying Denizbank from Russia’s Sberbank at a roughly 20 percent discount to a previously agreed price, after a steep fall in the Turkish lira.