Abu Dhabi National Oil Company's logistics and services subsidiary expects increased demand on its capacity and eyes additional fleet acquisitions on the back of the state-owned firm's upstream and downstream expansion.
"Adnoc has already announced growth in capacity from 3.5 million to four to five million barrels per day by 2030, so our crude oil carriers will grow with that definitely," Adnoc Logistics & Services chief executive Captain Abdulkareem Al Masabi told The National in an interview in Abu Dhabi. "Upstream, there is already mention of the purchase of two VLCCs [very large crude carriers]. Downstream as well, in terms of petrochemicals will be tripling after the launch of [their] strategy, so this creates capacity for us."
The logistics unit is working closely with the the parent company to determine how it can bundle its offering to customers.
"Shipping of course is a very important part of all logistics," the chief executive said.
Adnoc Logistics & Services, which was formed after the merger of three Adnoc units in 2016, said it will acquire its first crude oil tankers, besides the expansion of its gas and dry bulk fleet, by adding more than 25 vessels over the next five years. Last week, the entity said it had increased revenue by 34 per cent following the integration of subsidiaries Adnatco, Irshad and Esnaad. The company's net operating profit also rose 220 per cent in the same period.
Following the merger, the entity has managed to generate higher cost and logistical efficiencies, helping customers achieve savings of around 20 per cent or more, said Cpt Al Masabi.
“We control the operations on our islands, the offshore logistics part, and we control the port, the warehousing element. So when you bundle all these services to one offering, you achieve between 15 to 20 per cent reduction of our offering, on an annual basis,” he said.
Adnoc Logistics & Services, which has around 123 vessels across its shipping, marine services, offshore logistics and merchant fleet segments, is currently seeking partnership opportunities, with a long-term view on increased commercialisation of its business, in alignment with Adnoc Group's transformation as an international energy company.
"We’re looking at some opportunities but also nothing has been finalised yet," said Cpt Al Masabi. The company is also looking at "project-by-project basis and across segments of the business, which could be in the bulk, in the tanker, in the gas but we’re at the early stage of looking at who will be the best partner.”
Following the full integration of systems and employees from the three units within Adnoc Logistics & Services, which was completed in 2018, the company is now looking at other commercial opportunities.
"Nothing prevents us from doing anything in the future in terms of privatisation,” said Cpt Al Masabi.
However, unlike other entities such as Adnoc Distribution, which floated 10 per cent of its shares in 2017, a possible initial public offering of full or parts of the logistics and services segment is not on the table.
“This is our first year that we’re operating as one entity and to realise the full potential of our work as one company, it will take us one or two three years," he said. "Post that who knows what will happen, but it is not on our radar today."