Adnoc wants to rival oil majors as it expands in refining, gas

The Adnoc building in Abu Dhabi. The UAE-based oil company wants to expand its gas operations. (Shutterstock)
Updated 14 November 2018

Adnoc wants to rival oil majors as it expands in refining, gas

  • Adnoc announced two gas deals with France’s Total and Italy’s Eni this week
  • Adnoc aims to reach 1 billion cubic feet per day of unconventional gas production before 2030

ABU DHABI: Abu Dhabi National Oil Co. (Adnoc) will remain wholly owned by the Abu Dhabi government and has no plan to go public, but the firm aspires to compete with Big Oil by expanding in refining and gas, Adnoc’s CEO told Reuters.
Adnoc, which announced two gas deals with France’s Total and Italy’s Eni this week, will strike more agreements in that sector and seek investment opportunities abroad in liquefied natural gas (LNG), Sultan Al-Jaber said.
“Adnoc will continue to be wholly owned by one and only one shareholder, and that is the Abu Dhabi government,” Al-Jaber said.
But the company will continue to “unlock the potential” of its other subsidiaries and assets as it works to gain access to new markets abroad and expand its share in oil and gas, he said.
“There will be more initiative (gas) plans,” Al-Jaber said in an interview in Abu Dhabi. “We are not going to expand beyond our borders in upstream. We don’t need to. We have access to vast, vast oil and gas reserves,” he said.
“Our expansion ... is going to be in downstream, whether refining or petrochemicals,” he added.
On Sunday, Adnoc said it had signed an agreement with Total, granting the French company a 40 percent stake in the Ruwais Diyab unconventional gas concession.

 

Adnoc aims to reach 1 billion cubic feet per day of unconventional gas production before 2030.
“This is untapped. No one is doing this at this scale in this region,” he said of the tight gas project with Total.
On Tuesday Adnoc signed a deal with Eni, awarding the Italian company a 25 percent stake in an offshore ultra-sour gas project.
A day earlier the Abu Dhabi producer also signed a framework agreement with national energy company Saudi Aramco to explore investment opportunities in natural gas and LNG.
As the diplomatic alliance between Riyadh and Abu Dhabi grows closer, cooperation between the two state-run firms is also increasing. The two companies are to invest jointly in an oil refinery and petrochemicals complex in India.
Aramco and Adnoc working together is “a powerhouse,” Al-Jaber said. “We are going to be soon looking and exploring LNG business opportunities together with Aramco,” he said.
Adnoc, the top national energy company of the UAE, a key member of OPEC, produces about 3 million barrels of oil and 10.5 billion cubic feet of raw gas a day.
Last week, it announced plans to increase its oil production capacity to 4 million barrels per day (bpd) by the end of 2020 and 5 million bpd by 2030 after unveiling new oil and gas finds.
The UAE wants to achieve gas self-sufficiency and possibly become a net gas exporter.
The UAE holds the seventh-largest proven reserves of natural gas in the world, at slightly more than 215 trillion cubic feet, according to the US Department of Energy.
Despite that, the UAE became a net gas importer in 2008 due to growing demand for power and as it needed gas to reinject into its oilfields to enhance crude production. The UAE has been importing gas from Qatar via the Dolphin Gas pipeline.
Adnoc, founded in 1971, has undergone major change since Al-Jaber’s appointment in 2016, part of wider economic reforms led by Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan.
Al-Jaber has embarked on privatizing its services businesses, ventured into oil trading and expanded partnerships with strategic investors. Adnoc sold
10 percent of fuel retail unit Adnoc Distribution in an initial public offering last year.
Adnoc needs to accept that business as usual will no longer allow the company to excel, Al-Jaber said.
“We want Adnoc ... to operate like an international oil company,” he said. “This is how I view a progressive Adnoc.”

FASTFACTS

40% – On Sunday, Adnoc said that it had signed an agreement with Total, granting the French company a 40 percent stake in the Ruwais Diyab unconventional gas concession.


Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

Updated 18 min 49 sec ago

Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

  • Tokyo core CPI marks biggest annual drop since May 2012
  • Data suggests nationwide consumer prices to stay weak
* Nov Tokyo core CPI -0.7% yr/yr, matches forecast
* Tokyo core CPI marks biggest annual drop since May 2012
* Data suggests nationwide consumer prices to stay weak (Adds analyst quote, background)
By Leika Kihara
TOKYO, Nov 27 : Core consumer prices in Tokyo suffered their biggest annual drop in more than eight years, data showed on Friday, an indication the hit to consumption from the coronavirus crisis continued to heap deflationary pressure on the economy.
The data, which is considered a leading indicator of nationwide price trends, reinforces market expectations that inflation will remain distant from the Bank of Japan’s 2% target for the foreseeable future.
“Consumer prices will continue to hover on a weak note as any economic recovery will be moderate,” said Dai-ichi Life Research Institute, which expects nationwide core consumer prices to fall 0.5% in the fiscal year ending March 2021.
The core consumer price index (CPI) for Japan’s capital, which includes oil products but excludes fresh food prices, fell 0.7% in November from a year earlier, government data showed, matching a median market forecast.
It followed a 0.5% drop in October and marked the biggest annual drop since May 2012, underscoring the challenge policymakers face in battling headwinds to growth from COVID-19.
The slump in fuel costs and the impact of a government campaign offering discounts to domestic travel weighed on Tokyo consumer prices, the data showed.
Japan’s economy expanded in July-September from a record post-war slump in the second quarter, when lockdown measures to prevent the spread of the virus cooled consumption and paralyzed business activity.
Analysts, however, expect any recovery to be modest with a resurgence in global and domestic infections clouding the outlook, keeping pressure on policymakers to maintain or even ramp up stimulus.