Abu Dhabi’s ADNOC seals $5.8bn refining and trading deal with ENI, OMV

ADNOC’s chief executive Sultan Al-Jaber said the equity partnership was a ‘one of a kind’ deal. (AFP)
Updated 27 January 2019

Abu Dhabi’s ADNOC seals $5.8bn refining and trading deal with ENI, OMV

  • The transaction is one of the largest ever in the refinery business
  • The partners will also establish a joint trading venture

ABU DHABI: Italy’s Eni and Austria’s OMV have agreed to pay a combined $5.8 billion to take a stake in Abu Dhabi National Oil Company’s (ADNOC) refining business and establish a new trading operation owned by the three partners.
The transaction, which expands ADNOC’s access to European markets, furthers Eni’s diversification away from Africa and gives OMV a downstream oil business outside Europe. It was hailed as a “one of a kind” deal by ADNOC’s Chief Executive Sultan Al-Jaber.
“The whole oil and gas industry hasn’t seen a transaction of this size and sophistication,” he said.
Under the agreement, Eni and OMV will acquire a 20 percent and a 15 percent share in ADNOC Refining respectively, with ADNOC owning the remaining 65 percent, the three companies said in statements on Sunday.
The partners will own the same proportions of the joint trading venture, they added.
OMV said that it would pay around $2.5 billion, while Eni said it would pay around $3.3 billion, giving ADNOC Refining, which has a total refining capacity of 922,000 barrels per day, an enterprise value of $19.3 billion.
The agreement includes output from the Ruwais Refinery, the fourth largest single site refinery in the world.
WIN/WIN
The new trading venture will expand market access for ADNOC Refining’s products with export volumes equivalent to approximately 70 percent of throughput.
“We are already well-positioned in Asia and we want to increase our market share there .... but this will also help us to have access to European markets and beyond,” Al-Jaber said.
Eni has signed several deals in the Middle East in recent months as it expands outside Africa where it is the biggest foreign oil and gas producer.
The company’s CEO Claudio Descalzi said the partnership would increase its global refining capacity by 35 percent.
“This transaction, which allows us to enter the United Arab Emirates’ downstream sector...(will make) Eni’s overall portfolio more geographically diversified, more balanced along the value chain, more efficient and more resilient to cope with market volatility,” he said.
OMV described the deal, which is set to close in the third quarter of 2019, as a major milestone in relation to its “Strategy 2025” plan. It said it would finance the deal primarily out of its cash flow.
“With (this transaction) OMV has established a strong integrated position in Abu Dhabi...spanning from upstream production to refining & trading and petrochemicals,” CEO Rainer Seele said.
Founded in 1971, ADNOC 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, who witnessed the signing of the three-way agreement.
Al-Jaber has embarked on privatising its services businesses, ventured into oil trading and expanded partnerships with strategic investors.


Saudi Arabia signs deal with German firm to distribute COVID-19 vaccine

Updated 8 min 58 sec ago

Saudi Arabia signs deal with German firm to distribute COVID-19 vaccine

  • The CureVac vaccine successfully passed the first phase of clinical trials in early November
  • The announcement is part of the Saudi government’s initiatives to prevent the spread of COVID-19

JEDDAH: Saudi Arabia has signed an agreement with a German firm to supply and distribute a coronavirus vaccine in the Kingdom.
Saudi Pharmaceutical Industries and Medical Appliances Corp. (SPIMACO) said on Sunday that it had signed the agreement with biopharmaceutical company CureVac on Nov. 27.
Under the agreement, SPIMACO will apply for the necessary approvals from the Ministry of Health and the Saudi Food and Drug Authority (SFDA) to meet the requirements for distributing the vaccine.
The CureVac vaccine successfully passed the first phase of clinical trials in early November. 
Results showed an increase in virus-neutralizing antibodies in all participants who took the dose, and more than 90 percent of patients were shown to have developed antibodies against both the receptors and the COVID-19 spike protein.
CureVac is aiming to lodge a submission to the European Medicines Agency during the first quarter of 2021.
The agreement includes the possibility of extending the supply and distribution rights to the UAE, Kuwait, Bahrain and Oman.
The announcement is part of the Saudi government’s initiatives to prevent the spread of COVID-19. 
In a statement on Nov. 11, Abdullah Al-Assiri, assistant deputy minister for preventive health, said the government had previously signed an agreement to receive early supplies of two or three different vaccines that were in the final stages of their clinical trials.
“Saudi Arabia will be one of the first countries to receive the vaccines,” he said during an interview on Saudia TV.
Saudi health officials have previously announced plans to offer free vaccinations by the end of 2021 to 70 percent of residents who have not contracted the virus.