In opening remarks at the 7th OPEC International Seminar, in Vienna, Dr Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc Group CEO noted that the company wants to optimise costs and seek value creation. Courtesy Adnoc
In opening remarks at the 7th OPEC International Seminar, in Vienna, Dr Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc Group CEO noted that the company wants to optimise costs and seek value cShow more

Adnoc seeks more value creation as it transforms into an integrated company



Abu Dhabi National Oil Company’s strategic shift in developing its upstream segment and repositioning as a downstream entity this year brings it closer to its ambition to become an integrated international oil company.

“We are embedding efficiency, commerciality and innovation into every aspect of our business," said Dr Sultan Al Jaber, Adnoc Group chief executive on Wednesday at the Opec seminar in Vienna. "We will leave no stone unturned when it comes to optimising costs and no avenue unexplored in the search for value creation."

The UAE’s primary oil producer is undergoing transformation in a bid to cater to all of the energy sector's value chain. Last year, it began a shift in strategy by spinning off 10 per cent of its retail and distribution unit Adnoc Distribution, its first initial public offering.

It started this year with a timely consolidation of its upstream business offshore, by selling off around 40 per cent to companies from its consuming base. Second, it revealed a Dh165 billion investment plan to develop its downstream business, which includes the development of the world’s largest refining facility by 2025.

"Their IPO started last year and now they are thinking of bringing even partnerships into their downstream business model to [make] it a more world-class commercially driven business rather than an NOC type [business],” says Iman Nasseri, managing director, Middle East at consultancy Facts Global Energy.

Abu Dhabi’s transformation to a more integrated global player comes out of necessity, where the business-as-usual approach of selling barrels and profiting are no longer lucrative given the vagaries of the oil industry. Abu Dhabi accounts for 4.2 per cent of all oil produced globally, according to the latest BP Statistical Review of World Energy. However, regional players like top oil exporter Saudi Arabia have realised the need to become more competitive in the face of a surging US production, which now accounts for around 14.1 per cent of global consumption, ahead of Riyadh’s own 12.1 per cent. Such competition necessitates a new approach to securing marketshare and profiting from new product streams - that companies such as Saudi Aramco and Kuwait Oil Company have increasingly adopted.

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Saudi Arabia in the first half of the year announced plans for a $5bn refining and petrochemicals facility adjacent to the existing Satorp in Jubail in partnership with France’s Total. It is also moving ahead with a plan to develop a $44bn refining and chemicals complex in the west coast of India, which Adnoc may join as a partner,.

Alan Gelder, global refining and oil marketing research head at Edinburgh-based energy consultancy Wood Mackenzie notes that while Adnoc may have come to the foreign downstream game later than its regional peers, the UAE company may be more successful in its scheme thanks to smart financing and collaboration. Overseas downstream acquisition by Gulf NOCs is not new. Kuwait has refining investments in Vietnam since 2008 and another in Oman’s Duqm region, which recently reached final investment decision.

"Between Aramco and the UAE, if they can be successful in partnering in that [Indian] west coast refinery, why would you not they try and repeat that elsewhere? The benefits of scale and strength [from Aramco] could be something that Adnoc can leverage and build on,” says Mr Gelder.

Adnoc’s recent upstream concession awards to companies such as Cepsa and OMV, which are owned by Mubadala Investment Company, could also translate into greater efficiencies when transitioning downstream, since the companies have long-established strong market base.

“If you look at Aramco, their main aspiration is to have refining capacity of 10 million bpd, that’s a huge number,” says Mr Gelder.

“Adnoc will be more akin to the Kuwaitis, which is less scale but through Mubadala, it does have interests in a number of international companies, so it’s not starting from zero. They work with Cepsa, Borealis, Nova, so they know how to do business in the region."

Adnoc also this year will look to grow through its newly set-up oil trading unit, a business segment that national oil companies from Oman, Iraq and Saudi Arabia have ventured into. It will also look to select preferred bidders for six hydrocarbon blocks that it offered through its first ever licensing round in April.

The oil company may have chosen the opportune moment to launch the round, notes Ellen Wald, author of “Saudi, Inc.” and president of Transversal Consulting. With the closing of the Iranian market to foreign investment, the UAE will remain an attractive destination for oil and gas companies scouting for cheap, risk-free barrels of oil in the Middle East.

“With oil prices rising and key agencies (along with some prominent energy hedge fund owners) forecasting that oil prices will rise precipitously in coming years if investment does not pick up, Adnoc may have picked exactly the right time to launch its first ever bidding,” says Ms Wald.

“Also, with companies exiting the Iranian energy sector, Adnoc may seem like the perfect alternative to the National Iranian Oil Company,” she adds.

Investment in upstream, which sagged following the low ebb in the oil markets over the last three years, has slowly begun to pick up, with Brent surging above $70 through the first half of the year. The UAE along with regional peers such as Kuwait is looking to spend.  Last year, Abu Dhabi's Supreme Petroleum Council approved a spending package of Dh400bn billion over the next five years to be spent unlocking unconventional, sour gas caps in Abu Dhabi as well as acquiring and developing downstream assets at home and abroad.

The challenge facing Adnoc, however, will be the timing of when its downstream plans will come to fruition. There are several large-scale refining and petrochemicals projects, such as Saudi Arabia’s west-coast $20bn oil-to-chemicals scheme in Yanbu or its recent plans with Total all competing for financial closure around the same time.

Adnoc's announcement of its downstream scheme on May 13 in the presence of global banking leaders was a smart move to gain leverage ahead of regional competing projects.

“Could it be a situation where lots and lots of projects need financing all at the same time? Possibly,” says Mr Gelder.

“In which case they would need to manage that requirement on the banking market but I suspect that’ll be a nice problem for them to have rather than a huge constraint."

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
RESULT

Esperance de Tunis 1 Guadalajara 1 
(Esperance won 6-5 on penalties)
Esperance: Belaili 38’
Guadalajara: Sandoval 5’

Company%20profile
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Tips for job-seekers
  • Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
  • Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.

David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East

COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
Game Changer

Director: Shankar 

Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram

Rating: 2/5

Drishyam 2

Directed by: Jeethu Joseph

Starring: Mohanlal, Meena, Ansiba, Murali Gopy

Rating: 4 stars

The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
Coffee: black death or elixir of life?

It is among the greatest health debates of our time; splashed across newspapers with contradicting headlines - is coffee good for you or not?

Depending on what you read, it is either a cancer-causing, sleep-depriving, stomach ulcer-inducing black death or the secret to long life, cutting the chance of stroke, diabetes and cancer.

The latest research - a study of 8,412 people across the UK who each underwent an MRI heart scan - is intended to put to bed (caffeine allowing) conflicting reports of the pros and cons of consumption.

The study, funded by the British Heart Foundation, contradicted previous findings that it stiffens arteries, putting pressure on the heart and increasing the likelihood of a heart attack or stroke, leading to warnings to cut down.

Numerous studies have recognised the benefits of coffee in cutting oral and esophageal cancer, the risk of a stroke and cirrhosis of the liver. 

The benefits are often linked to biologically active compounds including caffeine, flavonoids, lignans, and other polyphenols, which benefit the body. These and othetr coffee compounds regulate genes involved in DNA repair, have anti-inflammatory properties and are associated with lower risk of insulin resistance, which is linked to type-2 diabetes.

But as doctors warn, too much of anything is inadvisable. The British Heart Foundation found the heaviest coffee drinkers in the study were most likely to be men who smoked and drank alcohol regularly.

Excessive amounts of coffee also unsettle the stomach causing or contributing to stomach ulcers. It also stains the teeth over time, hampers absorption of minerals and vitamins like zinc and iron.

It also raises blood pressure, which is largely problematic for people with existing conditions.

So the heaviest drinkers of the black stuff - some in the study had up to 25 cups per day - may want to rein it in.

Rory Reynolds

The specs

Engine: Dual 180kW and 300kW front and rear motors

Power: 480kW

Torque: 850Nm

Transmission: Single-speed automatic

Price: From Dh359,900 ($98,000)

On sale: Now

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

UAE currency: the story behind the money in your pockets
Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
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SPECS
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COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
'THE WORST THING YOU CAN EAT'

Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.

Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines: 

Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.

Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.

Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.

Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.

Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.

Paatal Lok season two

Directors: Avinash Arun, Prosit Roy 

Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong

Rating: 4.5/5

Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

Rating: 2/5