ADNOC may not be the largest oil company in the world. It doesn’t have the world’s largest oil reserves. The business, which is responsible for making the UAE the third-largest producer in OPEC , is quietly charting its course.
Despite a pandemic that has wiped out worldwide gasoline consumption, ADNOC Distribution, the company’s retail arm, has announced a bigger 2020 dividend than in 2019. In a statement, ADNOC said despite present market conditions, ADNOC Distribution is confident and unwavering in the delivery of its strategic commitments and sustainable returns for its shareholders.
ADNOC is now working tirelessly to achieve the goals of its 2030 plan, which include increased collaborations and a more active approach to managing its companies and asset portfolio.
How and when was ADNOC founded?
ADNOC, like other significant corporations, was founded by the tenacity and resolve of a few individuals.
The first geological survey was conducted in 1935, which marked the start of ADNOC’s journey. Sheikh Zayed bin Sultan Al Nahyan, the UAE’s founding father, led a group of 16 tribesmen southwest of Abu Dhabi in 1937, when his idea for the development of the UAE’s oil and gas resources came to the picture.
The initial concession agreement was signed in 1939. Oil was discovered in the United Arab Emirates in 1958, at Murban Bab oil field.
The first oil find was a watershed moment in Abu Dhabi’s remarkable economic turnaround.
The first ship carrying Abu Dhabi crude left the Jebel Dhanna port in late 1963. ADNOC was founded in 1971 as the Abu Dhabi National Oil Company – ADNOC – under the command of Sheikh Zayed as more oil fields were discovered and earnings from oil production began to climb.
The Abu Dhabi Council of Ministers established ADNOC Drilling in 1972 as the National Drilling Company (NDC). The business purchased its first rig, AD-1, in 1973, and it is still visible today as a monument on the Abu Dhabi Corniche, near the present headquarters of ADNOC Group.
ADNOC Distribution, the first UAE government-owned corporation specializing in the national and worldwide marketing and distribution of petroleum products, was created by royal order in 1973. ADNOC Distribution established a lubricant mixing and packaging business in Sas Al Nakhl, Abu Dhabi, in 1979.
The company began supplying craft fuels to Abu Dhabi International Airport in 1982, and a decade later, it became a member of the American Petroleum Institute (API) and got its first API lubricants certification.
In 2013, ADNOC Distribution purchased 75 service stations from Emarat: Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain, and Fujairah. The next year, the business purchased 25 service stations from Emirates National Oil Company in Sharjah (Enoc).
The Abu Dhabi Securities Exchange began selling ADNOC Distribution shares in 2017.
Going to markets
ADNOC has followed a different path than its worldwide peers, opting for less-publicized mergers and initial public offerings (IPOs). The corporation has been attempting to unlock the value of its assets through divestitures over the previous few years.
ADNOC signed a $20.7 billion pipeline agreement with six worldwide investors last year, making it one of the largest in the energy infrastructure market. ADNOC is expected to receive approximately $10 billion in upfront proceeds from the transaction.
In a statement, Sultan Al Jaber, said the investment signals sustained strong interest in ADNOC’s low-risk, income-generating assets and sets another benchmark for large-scale energy infrastructure investments in the UAE and the wider region.
It’s one thing to enter private agreements; it’s quite another to create a space in the public domain, which is exactly what ADNOC started doing the same year. Murban, was first traded as a contract for the future on the ICE Futures Abu Dhabi (IFAD) commodities exchange in March.
Customers benefit from the new and transparent prices along with the ease to hedge and manage risks, and better access to Murban crude by making it a crude that comes with business freedom, like Brent or WTI (West Texas Intermediate). ADNOC’s flagship crude grade is now more accessible to a wider range of market participants around the world.
ADNOC and ADQ form a new joint venture
ADNOC has set its sights on other potential revenue streams while making the most of its oil production operations. One of them is the production of petrochemicals, which are chemical products that are utilised in everything from clothing to automobiles.
ADNOC and ADQ launched a new collaboration with Ta’ziz in November last year to develop a Dh18 billion industrial chemicals in UAE. It will cost $2 billion and will comprise a new port, utilities plants, infrastructure, feedstock supply, and shared services (Dh7 billion).
According to the company’s statement, Ta’ziz would look into projects that can manufacture specialty chemicals on a worldwide scale, with potential for additional investors and partners to join. The total investment in these projects might exceed $3 billion (Dh11 billion), with the majority of the chemicals being produced for the first time in the UAE.
ADNOC has lately expressed interest in studying the potential of hydrogen, a zero-carbon fuel that has grown in popularity in recent years. The Abu Dhabi Hydrogen Alliance was founded by ADNOC, Mubadala, and ADQ with the goal of establishing Abu Dhabi as a trusted leader in low-carbon green and blue hydrogen in expanding international markets.
ADNOC, which produces roughly 300,000 tons of hydrogen annually as part of its industrial processes, also expressed interest in exploring the hydrogen market with India’s public and private sectors.
Deal with Japan
ADNOC recently sold its first cargo of “blue ammonia” to Japanese trading business Itochu for use in fertilizer production, in collaboration with Fertiglobe.
The carbon dioxide by-product of hydrogen production is caught and stored, and blue ammonia is created from nitrogen and hydrogen generated from natural gas feedstocks. Ammonia can be utilized as a low-carbon fuel in a variety of industries, including transportation, power generation, and the manufacturing of steel, cement, and fertilizer.