Abu Dhabi approves $109bn Adnoc capital expenditure plan

28 November 2017
Investment will be made in upstream and downstream sectors

Abu Dhabi’s Supreme Petroleum Council (SPC) has approved Abu Dhabi National Oil Company’s (Adnoc’s) plans for capital expenditure of more than AED400bn ($109bn) over the next five years, as the oil major moves ahead with expansion of its upstream and downstream capabilities and infrastructure as part of its 2030 strategy.

The energy council approved Adnoc’s plans to explore the emirate’s unconventional gas resources and also boost investments in international downstream ventures.

Under the 2030 strategy, Adnoc is aiming to grow its crude refining capacity by 60 per cent and more than triple its petrochemical production, to 14.4 metric tonnes per annum (mtpa) by 2025. The emirate is also pushing ahead with an aromatics project to covert naphtha, which is currently exported, into gasoline and aromatics.

The oil company is also developing a new linear alkyl benzene project and new mixed feed cracker at Borouge. MEED reported earlier in November that Adnoc had signed an agreement with Spain’s Cepsa, wholly owned by the local Mubadala Investment Company, to build the linear alkyl benzene (Lab) facility at Ruwais, which will be integrated with Adnoc’s Ruwais Refinery.

The Ruwais facility is expected to have a planned production capacity of 150,000 tonnes and is expected to begin commercial operation in 2021. Exports from the facility will be aimed at the Indian and South Asian markets, according to a released statement from Adnoc. Initial engineering work on the facility is scheduled to begin in 2018.

The national oil company is also currently undertaking an initial public offering (IPO) for part of its distribution business.

The offer period for the first tranche started on 26 November and will close on 6 December. The offer period for a second tranche also started on 26 November and will close on 7 December.

The company is going to sell between 1.25bn and 2.5bn of shares in the fuel distribution arm, which represents between 10 and 20 per cent of the total issued shares in the company. Based on a share pricing of AED2.35 and AED2.95, the total equity value of the distribution business would equate to $8-10bn, with the IPO potentially raising up to $2bn.

The Abu Dhabi National Oil Company for Distribution was established in 1973, and has an approximate 67 per cent market share of fuel service stations in the UAE. The company currently has 360 fuel stations located in the emirates of Abu Dhabi and Sharjah. The firm also operates 235 Adnoc Oasis convenience stores, making it the largest retailer in the UAE in terms of number of stores.

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