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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Read more:
[ Adnoc receives 'considerable' interest from potential partners in downstream projects ]
[ Adnoc, India’s Isprl celebrate arrival of first crude cargo to Mangalore storage facility ]
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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."
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
Company Profile
Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000
Sly Cooper and the Thievius Raccoonus
Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
Rating: 5/5
The biog
Favourite Quote: “Real victories are those that protect human life, not those that result from its destruction emerge from its ashes,” by The late king Hussain of Jordan.
Favourite Hobby: Writing and cooking
Favourite Book: The Prophet by Gibran Khalil Gibran
The specs
Engine: Single front-axle electric motor
Power: 218hp
Torque: 330Nm
Transmission: Single-speed automatic
Max touring range: 402km (claimed)
Price: From Dh215,000 (estimate)
On sale: September
COMPANY PROFILE
Company name: Nomad Homes
Started: 2020
Founders: Helen Chen, Damien Drap, and Dan Piehler
Based: UAE and Europe
Industry: PropTech
Funds raised so far: $44m
Investors: Acrew Capital, 01 Advisors, HighSage Ventures, Abstract Ventures, Partech, Precursor Ventures, Potluck Ventures, Knollwood and several undisclosed hedge funds
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
The specs: Fenyr SuperSport
Price, base: Dh5.1 million
Engine: 3.8-litre twin-turbo flat-six
Transmission: Seven-speed automatic
Power: 800hp @ 7,100pm
Torque: 980Nm @ 4,000rpm
Fuel economy, combined: 13.5L / 100km
Abu Dhabi traffic facts
Drivers in Abu Dhabi spend 10 per cent longer in congested conditions than they would on a free-flowing road
The highest volume of traffic on the roads is found between 7am and 8am on a Sunday.
Travelling before 7am on a Sunday could save up to four hours per year on a 30-minute commute.
The day was the least congestion in Abu Dhabi in 2019 was Tuesday, August 13.
The highest levels of traffic were found on Sunday, November 10.
Drivers in Abu Dhabi lost 41 hours spent in traffic jams in rush hour during 2019
COMPANY PROFILE
Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures
Company Profile
Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government
A Bad Moms Christmas
Dir: John Lucas and Scott Moore
Starring: Mila Kunis, Kathryn Hahn, Kristen Bell, Susan Sarandon, Christine Baranski, Cheryl Hines
Two stars
Grand slam winners since July 2003
Who has won major titles since Wimbledon 2003 when Roger Federer won his first grand slam
Roger Federer 19 (8 Wimbledon, 5 Australian Open, 5 US Open, 1 French Open)
Rafael Nadal 16 (10 French Open, 3 US Open, 2 Wimbledon, 1 Australian Open)
Novak Djokovic 12 (6 Australian Open, 3 Wimbledon, 2 US Open, 1 French Open)
Andy Murray 3 (2 Wimbledon, 1 US Open)
Stan Wawrinka 3 (1 Australian Open, 1 French Open, 1 US Open)
Andy Roddick 1 (1 US Open)
Gaston Gaudio 1 (1 French Open)
Marat Safin 1 (1 Australian Open)
Juan Martin del Potro 1 (1 US Open)
Marin Cilic 1 (1 US Open)
Generational responses to the pandemic
Devesh Mamtani from Century Financial believes the cash-hoarding tendency of each generation is influenced by what stage of the employment cycle they are in. He offers the following insights:
Baby boomers (those born before 1964): Owing to market uncertainty and the need to survive amid competition, many in this generation are looking for options to hoard more cash and increase their overall savings/investments towards risk-free assets.
Generation X (born between 1965 and 1980): Gen X is currently in its prime working years. With their personal and family finances taking a hit, Generation X is looking at multiple options, including taking out short-term loan facilities with competitive interest rates instead of dipping into their savings account.
Millennials (born between 1981 and 1996): This market situation is giving them a valuable lesson about investing early. Many millennials who had previously not saved or invested are looking to start doing so now.
The specs
Engine: 77kWh 2 motors
Power: 178bhp
Torque: 410Nm
Range: 402km
Price: Dh,150,000 (estimate)
On sale: TBC
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
The past winners
2009 - Sebastian Vettel (Red Bull)
2010 - Sebastian Vettel (Red Bull)
2011 - Lewis Hamilton (McLaren)
2012 - Kimi Raikkonen (Lotus)
2013 - Sebastian Vettel (Red Bull)
2014 - Lewis Hamilton (Mercedes)
2015 - Nico Rosberg (Mercedes)
2016 - Lewis Hamilton (Mercedes)
2017 - Valtteri Bottas (Mercedes)
The British in India: Three Centuries of Ambition and Experience
by David Gilmour
Allen Lane
If you go
Flying
Despite the extreme distance, flying to Fairbanks is relatively simple, requiring just one transfer in Seattle, which can be reached directly from Dubai with Emirates for Dh6,800 return.
Touring
Gondwana Ecotours’ seven-day Polar Bear Adventure starts in Fairbanks in central Alaska before visiting Kaktovik and Utqiarvik on the North Slope. Polar bear viewing is highly likely in Kaktovik, with up to five two-hour boat tours included. Prices start from Dh11,500 per person, with all local flights, meals and accommodation included; gondwanaecotours.com
Abu Dhabi GP schedule
Friday: First practice - 1pm; Second practice - 5pm
Saturday: Final practice - 2pm; Qualifying - 5pm
Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm
SPECS
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
RESULTS
Tottenham 1
Jan Vertonghen 13'
Norwich 1
Josip Drmic 78'
2-3 on penalties
KINGDOM OF THE PLANET OF THE APES
Director: Wes Ball
Starring: Owen Teague, Freya Allen, Kevin Durand
Rating: 3.5/5
THE BIO: Mohammed Ashiq Ali
Proudest achievement: “I came to a new country and started this shop”
Favourite TV programme: the news
Favourite place in Dubai: Al Fahidi. “They started the metro in 2009 and I didn’t take it yet.”
Family: six sons in Dubai and a daughter in Faisalabad
COMPANY PROFILE
Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends
The specs: 2018 Mercedes-Benz E 300 Cabriolet
Price, base / as tested: Dh275,250 / Dh328,465
Engine: 2.0-litre four-cylinder
Power: 245hp @ 5,500rpm
Torque: 370Nm @ 1,300rpm
Transmission: Nine-speed automatic
Fuel consumption, combined: 7.0L / 100km
MADAME WEB
Director: S.J. Clarkson
Starring: Dakota Johnson, Tahar Rahim, Sydney Sweeney
Rating: 3.5/5
KEY DATES IN AMAZON'S HISTORY
July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington
July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon
1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024
1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs
2000: Amazon Marketplace opens, allowing people to sell items on the website
2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006
2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black
2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year
2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video
2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started
2009: Amazon introduces Amazon Basics, its in-house label for a variety of products
2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013
2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS
2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa
2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition
2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Getting there
The flights
Flydubai operates up to seven flights a week to Helsinki. Return fares to Helsinki from Dubai start from Dh1,545 in Economy and Dh7,560 in Business Class.
The stay
Golden Crown Igloos in Levi offer stays from Dh1,215 per person per night for a superior igloo; www.leviniglut.net
Panorama Hotel in Levi is conveniently located at the top of Levi fell, a short walk from the gondola. Stays start from Dh292 per night based on two people sharing; www. golevi.fi/en/accommodation/hotel-levi-panorama
Arctic Treehouse Hotel in Rovaniemi offers stays from Dh1,379 per night based on two people sharing; www.arctictreehousehotel.com
Profile box
Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
The biog
Job: Fitness entrepreneur, body-builder and trainer
Favourite superhero: Batman
Favourite quote: We must become the change we want to see, by Mahatma Gandhi.
Favourite car: Lamborghini
BACK TO ALEXANDRIA
Director: Tamer Ruggli
Starring: Nadine Labaki, Fanny Ardant
Rating: 3.5/5
UPI+facts
More+than+2.2+million+Indian+tourists+arrived+in+UAE+in+2023
More+than+3.5+million+Indians+reside+in+UAE
Indian+tourists+can+make+purchases+in+UAE+using+rupee+accounts+in+India+through+QR-code-based+UPI+real-time+payment+systems
Indian+residents+in+UAE+can+use+their+non-resident+NRO+and+NRE+accounts+held+in+Indian+banks+linked+to+a+UAE+mobile+number+for+UPI+transactions
The Cairo Statement
1: Commit to countering all types of terrorism and extremism in all their manifestations
2: Denounce violence and the rhetoric of hatred
3: Adhere to the full compliance with the Riyadh accord of 2014 and the subsequent meeting and executive procedures approved in 2014 by the GCC
4: Comply with all recommendations of the Summit between the US and Muslim countries held in May 2017 in Saudi Arabia.
5: Refrain from interfering in the internal affairs of countries and of supporting rogue entities.
6: Carry out the responsibility of all the countries with the international community to counter all manifestations of extremism and terrorism that threaten international peace and security
The pillars of the Dubai Metaverse Strategy
Encourage innovation in the metaverse field and boost economic contribution
Develop outstanding talents through education and training
Develop applications and the way they are used in Dubai's government institutions
Adopt, expand and promote secure platforms globally
Develop the infrastructure and regulations
More coverage from the Future Forum