The state oil company has a unique role to play in hydrocarbon-rich economies – from Norway to Venezuela to Kazakhstan, and especially here in the Arabian Gulf.
Some countries manage their bounty well and others succumb to the paradox of plenty, as economists put it, and end up squandering it.
The Abu Dhabi approach to managing its oil wealth with an eye to the UAE's future has been among the more enlightened for some decades, as respected oil historian Daniel Yergin says elsewhere in these pages. The UAE has easily the most diverse economy among its peers and the country has a fiscal cushion sufficient to smooth the transition to a post-oil world.
However, the kudos bestowed upon Adnoc yesterday by Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, recognises that there is no room for complacency.
“Expanding strategic partnership opportunities of our national companies enhances their competitiveness,” Sheikh Mohamed said of Adnoc's latest plans. “Adnoc's initiative will expand strategic partnership opportunities, deliver strong financial returns, and support the UAE’s future growth.”
There is a pressing need to become more competitive and diverse. The oil price slump since 2014 followed a number of fat years when the big oil companies got bloated, national oil companies included. The leaner years have been accompanied by a growing sense that political and technological forces could speed the transition to the post-oil world that everyone knows is coming. All the big oil producing states have said they must plan for this but not all are putting those plans into action with the requisite gusto.
A key plank of this transition will be corporate culture. One of the main functions of a national oil company, such as Adnoc, is to foster the culture that promotes technological and management talent that the country will need to secure its future. Abu Dhabi's leadership knows there is a danger that such talent can get lost in large bureaucracies.
Last year, Adnoc began to slim down its bureaucracy and clear up lines of reporting, making managers more directly responsible for identifiable goals. The company later struck innovative deals to bring in partners who can transfer technology and open up essential markets.
The message is clear, both for internal talent and potential external partners. For Adnoc staff it is saying that opportunities to make your mark are opening up. To the outside world, it is saying that Adnoc is open for business, whether you're from the traditional oil and gas directory or from, say, Silicon Valley, the City of London, or some far corner of an emerging Chinese industry.
