Adnoc and OCI prepare to list fertiliser joint venture

Adnoc holds a 42% stake in the company, known as Fertiglobe, with OCI retaining the majority 58% share

The Belbazem block, which lies 120 kilometres northwest of Abu Dhabi city, is also expected to produce 27 million cubic feet per day of associated gas by 2023.Courtesy: Adnoc

Abu Dhabi National Oil Company and its business partner OCI are preparing for a potential listing of Fertiglobe, their fertiliser manufacturing joint venture.

Adnoc holds a 42 per cent stake in the company, known as Fertiglobe, with OCI retaining the majority 58 per cent interest. OCI is listed on the Euronext Amsterdam exchange and has Egyptian billionaire Nassef Sawiris as its biggest shareholder. Microsoft founder Bill Gates also owns a 6 per cent stake in the company.

“Adnoc regularly assesses investment and partnership opportunities across its entire value chain and is currently exploring a number of potential opportunities, including a potential listing of Fertiglobe, our fertiliser JV business with OCI," a spokesman for the company said in a statement.

The export-focused nitrogen fertiliser business was formed in 2019 following the merger of Adnoc's fertiliser arm and OCI's Middle East nitrogen fertiliser business. Fertiglobe is headquartered at the Abu Dhabi Global Market. Dr Sultan Al Jaber, Adnoc group chief executive and managing director is chairman of the company.

“In less than two years, a global fertiliser player was created, based in Abu Dhabi," the Adnoc spokesman said.

"As Adnoc continues to deliver on its 2030 growth strategy, we will continue to evaluate investment and partnership opportunities that create value and drive sustainable growth for Abu Dhabi and the UAE," he added.

OCI confirmed earlier this week that it is preparing for a listing of Fertiglobe in a disclosure to the Euronext when announcing its first quarter results. The company swung back into profit in the first quarter, registering an adjusted net income of $94 million, compared with a loss of $82m for the same period last year. Revenue rose 38 per cent to $1.12 billion.

The fertiliser joint venture was formed following Adnoc's plans in 2019 to invest Dh165 billion in developing its downstream business over the following five years. The move came amid a growing pivot towards building a stronger product portfolio among Middle East oil exporters.

Adnoc has been looking for ways to monetise some of its non-core assets as it looks to diversify income streams and bring in foreign capital to develop its business.

Last year, Adnoc attracted a consortium of the world's leading infrastructure and sovereign wealth funds to its gas pipelines. The $20.7bn deal was the largest such transaction in the energy space in 2020. This followed on from a 2019 deal to sell a stake in its oil pipelines.

The company has also raised capital through the sale of a minority stake in its non-core property portfolio last year and through the flotation of a 10 per cent stake in its distribution business in late 2017. An institutional placing in September last year doubled the free float of its shares to 20 per cent.