By Maha El Dahan, Yousef Saba and Ron Bousso
DUBAI (Reuters) – The United Arab Emirates is working to reshape the state-owned Abu Dhabi Nationwide Oil Firm (ADNOC) into the picture of a serious world oil firm by boosting its world enlargement and discovering new sources of income to maximise the Gulf state’s earnings.
Like its Gulf neighbors Saudi Arabia and Qatar, the UAE needs to use fossil gasoline sources whereas there’s nonetheless sturdy demand for oil and gasoline and spend revenues on diversifying its financial system to cut back its dependence on hydrocarbons.
As a part of this technique, ADNOC informed Reuters that it’s actively pursuing chosen alternatives within the fields of renewable power, gasoline, petrochemicals and liquefied pure gasoline, with out offering particulars of any particular objectives.
The corporate was in search of LNG belongings in Africa and was contemplating shopping for Galp’s 10% stake in a multi-billion-dollar pure gasoline venture within the Rovuma Basin off the coast of Mozambique, two folks acquainted with the matter stated.
ADNOC declined to remark, and Galeb didn’t reply to Reuters’ questions.
ADNOC has already been busy on the deal entrance this yr. It has purchased a stake in an Azerbaijani gasoline area, made a bid for BP to purchase a stake in Israeli gasoline firm NewMed Power, opened takeover talks with German plastics maker Covestro, and is trying to create a $20 billion chemical compounds big with Austria’s OMV.
The state-owned firm additionally informed Reuters it was investing in power buying and selling, with out offering additional particulars. Reuters reported final yr that ADNOC intends to open a industrial workplace in Geneva and a consultant workplace in London.
An ADNOC spokesperson stated in response: “As a part of our worldwide progress technique, we’re targeted on increasing our presence in renewables, gasoline, LNG and chemical compounds, and are actively pursuing chosen alternatives, whereas additionally investing in and rising our industrial capabilities.” Written questions.
ADNOC has two buying and selling arms, established in 2020: ADNOC Buying and selling, which focuses on crude oil, and ADNOC International Buying and selling, a three way partnership with Italy’s Eni and OMV that focuses extra on refined merchandise.
Whereas ADNOC’s deal-making dates again to 2017 when it listed its gasoline distribution unit, the tempo of change accelerated after a board assembly in November chaired by UAE President Mohammed bin Zayed.
The council offered plans to double oil manufacturing to five million barrels per day till 2027, and likewise permitted a five-year work plan and capital spending value $150 billion.
An knowledgeable supply stated: “The considering is to maneuver away from the normal state oil firm mannequin to a mannequin extra just like the Worldwide Oil Firm.”
The transformation at ADNOC is just like the continuing adjustments on the state-owned power giants of Saudi Arabia and Qatar.
The nationwide power champions – ADNOC, Saudi Aramco, and Qatar Power – drive their very own economies, however have historically targeted on producing oil and gasoline at residence.
Now, because the transition to renewable power accelerates, the timeline for so-called nationwide oil firms (NOCs) to monetize their reserves is getting shorter, and they’re additionally multiplying alternatives additional afield.
To drive its adjustments, ADNOC has employed greater than 3,370 workers, together with 28 senior managers, to date this yr from firms resembling world power firms, buying and selling firms, banks and consulting companies, in response to knowledge on the recruitment community LinkedIn.
LinkedIn knowledge exhibits that the variety of ADNOC workers elevated by 13% this yr, and by 1 / 4 over the previous two years, to succeed in about 32,750 workers. However the precise quantity, which ADNOC by no means disclosed, is now greater than 40,000, stated one particular person acquainted with the matter.
“As we proceed to develop our enterprise, we’re creating thrilling alternatives for our gifted workforce as we work to speed up the transformation and decarbonization of our firm and safe it for the long run,” an ADNOC spokesperson stated in response to questions on recruitment.
Michele Fiorentino, who served as chief funding officer from 2017 to 2020, confirmed to Reuters that he just lately returned to ADNOC from US oil companies firm Baker Hughes to function government vice chairman of low carbon options and enterprise growth.
He reviews to Musabih Al Kaabi, head of low carbon options and worldwide progress at ADNOC, who can also be a brand new worker who joined the corporate in January. Emirati Al Kaabi additionally chairs Mubadala Power Firm and is a member of the boards of administrators of a number of state-linked firms.
Different latest hires embody Bart Cornelissen, who left Deloitte to develop into ADNOC’s senior vice chairman of group and portfolio technique final month, in response to LinkedIn.
Michael Hafner, a long-time funding banker within the power sector – most just lately at Greenhill & Co and beforehand at Deutsche Financial institution and UBS – joined ADNOC final month as a senior advisor to the Govt Workplace for Enterprise Improvement.
Cornelissen and Hafner didn’t reply to requests for remark.
Different senior managers have just lately been appointed from Western firms together with Morgan Stanley, HSBC, Natixis, Litasco, Borealis, Whole Energies, Shell and Eni, in response to LinkedIn.
Latest appointments at ADNOC’s buying and selling arms embody graduates of Gunvor, Litasco, Shell and TotalEnergies, the recruitment community confirmed.
Knowledgeable sources stated that the Emirati firm was trying to purchase the Gunfor power buying and selling group final yr, however the talks collapsed as a result of ADNOC needed to acquire a controlling stake, whereas the Gunfor shareholder solely needed to surrender a minority.
An knowledgeable supply stated: “ADNOC needs to develop in Europe, whether or not by way of Gunvor or organically.” “Now that the Gunvor deal is off the desk, they may deal with natural progress.”
Local weather summit
Regardless of the pace of the adjustments, analysts say that ADNOC, like its opponents in Saudi Arabia and Qatar, will at all times stay considerably constrained by authorities management. “Nationwide Olympic firms – even when they’re prepared IOCs – are finally tied to their governments and should serve the objectives of the nation’s management,” stated Neil Quilliam, an affiliate fellow at assume tank Chatham Home.
He stated, “There may be nothing fallacious with that and lots of main nationwide firms serve this objective, however the worth that have to be paid will at all times be ADNOC’s freedom to maneuver.”
It is usually tough to reconcile the duty of maximizing oil revenues to finance financial transformation with world efforts to speed up the transition in direction of low-carbon fuels and shortly cut back the manufacturing and consumption of fossil fuels.
For instance, the United Nations was closely criticized for giving the presidency of this yr’s COP28 local weather summit to the UAE. Sultan Al Jaber, ADNOC’s CEO since 2016, will chair the assembly, which local weather activists say will restrict the ambition of efforts to mitigate local weather change.
Jaber’s supporters, together with, for instance, US local weather envoy John Kerry, stated his function at ADNOC would assist bridge the hole within the dialog and speed up change.
ADNOC has stated it should spend $15 billion on climate-friendly tasks by 2027. Jaber additionally chairs Abu Dhabi’s Masdar, of which ADNOC owns 24%. It goals to put in 100 gigawatts of renewable power by 2030, and ultimately double that.
(Reporting by Maha El-Dahan and Youssef Saba in Dubai and Ron Busso in London; Modifying by David Clarke)