ADNOC to offload 35% stake in ADNOC Refining to Eni and OMV for $5.8bn

Italy’s Eni and Austria’s OMV, through separate agreements, have agreed to acquire stakes of 20% and 15%, respectively in ADNOC Refining – the refining business of Abu Dhabi National Oil Company (ADNOC), for a combined total of $5.8 billion.

ADNOC will keep the remaining stake of 65% in the refining company, which boasts of a total refining capacity of 922,000 barrels per day.

OMV will buy its stake in the Abu Dhabi-based refining company for around $2.5 billion. On the other hand, Eni will pay around $3.3 billion for its stake. The two deals give ADNOC Refining an enterprise value of $19.3 billion.

Established in 1999 as a separate entity, ADNOC Refining is involved in refining of crude oil and condensate in addition to supply of petroleum products.

The Ruwais East and Ruwais West refineries located in Ruwais and the Abu Dhabi Refinery are all operated by ADNOC Refining.

Eni and OMV to partner ADNOC in ADNOC Refining. Photo courtesy of ADNOC.

Claudio Descalzi, CEO of Eni, said: “These agreements consolidate our strong partnership with ADNOC. In the space of less than one year, we have been able to create a business hub with world class upstream operations and a material and efficient refinery capacity with further potential growth.

“This transaction, which allows us to enter the United Arab Emirates’ downstream sector and represents a 35% increase in Eni’s global refining capacity, is in line with our announced strategy to make Eni’s overall portfolio more geographically diversified, more balanced along the value chain, more efficient and more resilient to cope with market volatility.”

ADNOC said that the partnership with Eni and OMV will enable expansion of refining and petrochemical operations at the Ruwais refinery and also in making more inroads in the downstream global market.

The three companies have also agreed to establish a trading joint venture that will commercialize export volumes and streamline the non-Abu Dhabi feedstock supply of ADNOC Refining. The stakes in the joint venture will be on the lines of the ADNOC Refining ownership.

H.H. Sheikh Mohamed Witnesses Signing of Landmark Strategic Refining and Trading Partnership Agreements Between ADNOC, Eni and OMV. Photo courtesy of PRNewsfoto/ADNOC.

Dr. Rainer Seele – Chairman of the OMV Executive Board and CEO said: “I am pleased to further build on our strategic partnership with ADNOC and Abu Dhabi. With the acquisition of a share in ADNOC Refining and the creation of a global Trading Joint Venture, OMV has established a strong integrated position in Abu Dhabi along the value chain, spanning from Upstream production to Refining & Trading and Petrochemicals. “This transaction is the next major milestone in OMV´s execution of Strategy 2025. We are confident that our extensive operational refining know how and trading experience will contribute to sustainable value creation and profitable growth.”

The transactions are likely to be closed in Q3 2019 based on satisfaction of customary closing conditions and regulatory approvals.