The Abu Dhabi National Oil Company (Adnoc) plans to set up an oil trading unit, as the energy major expands its offering amid a new strategy aimed at beefing up its sales and creating new revenue streams, the company’s chief executive said on Monday.
The UAE is on track to ramp up its oil production capacity to 3.5 million barrels of oil per day and plans to boost its refining capacity by at least 60 per cent, Dr Sultan Al Jaber told participants attending the four-day Abu Dhabi International Petroleum Exhibition and Conference that started on Monday.
“We also plan to introduce non-speculative asset backed trading to further stretch the dollar from every barrel we produce,” said Dr Al Jaber.
Adnoc is joining regional peers in setting up its own oil trading unit.
In May, Iraq’s State Organization for Marketing of Oil (Somo) set up a Dubai-based joint venture with the Swiss trading unit of Russia’s Lukoil, to sell its oil.
State-owned Oman Oil Company has its own trading unit, Oman Trading International, to trade in crude products and liquefied natural gas. Aramco Trading Company, a unit of state-owned Saudi Aramco, began trading refined, liquid chemical, and polymer products in 2012.
The UAE is also developing its production of sour gas, or gas with high sulphur content, to meet rising needs for the fuel for power generation, petrochemical production and other industries.
“In gas, we will continue to develop our natural resources by developing undeveloped reservoirs, tapping into vast gas caps and scaling up our sour gas production using best in class methods developed here in the UAE,” said Dr Al Jaber.
Adnoc plans to nearly triple production of petrochemicals and higher-value products to 11.4 million tonnes per annum (tpa) by 2025 from the current output of 4.5 million tpa, company officials had previously said.
“In downstream we plan to grow crude refinery capacity by at least 60 per cent and triple our petrochemical production capacity,” said Dr Al Jaber. “Once complete, we will convert almost 20 per cent of our crude to chemicals, diversifying our range of higher value products and providing a natural hedge to oil price movements and fluctuations.”
Dr Al Jaber confirmed that over a dozen companies have expressed interest in a major offshore oil concession that is up for renewal in March next year.
The current shareholders in the concession are BP with 14.67 per cent, Total with 13.33 per cent, and Japan’s Jodco with 12 per cent. The Abu Dhabi Government, through Adnoc, has a 60 per cent holding.
“Our enhanced efficiency is reinforcing our position among the world’s lowest cost producers and attracting a diverse class of international investors,” said Dr Al Jaber.
“This is clearly reflected in the unprecedented interest in the upcoming offshore concessions, which have in fact attracted over a dozen potential partners from all over the world. That is an achievement.”