The Abu Dhabi National Oil Company (Arabic: شركة بترول أبو ظبي الوطنية), known by its acronym ADNOC, is the state-owned oil company of the United Arab Emirates (UAE).
It is the world's 12th largest oil company by production.[2] As of 2021, the company has an oil production capacity exceeding 4 million bpd with plans to increase to 5 million bpd by 2030.[3][4] It is the United Arab Emirate's largest oil company.[5][6][7]
ADNOC's output was roughly flat at about 2.5 million barrels per day during the 1990s. It stood at 2.9 mbpd in 2008. Although its financial indicators are difficult to assess as the company has been described as secretive, it has also been described as efficient and well managed.[8]
ADNOC is one of few oil companies in the world to make a substantial investment to increase oil production amid growing pressure to reduce output due to climate change.[9]
History
In November 2019, ADNOC received approval from the emirate's Supreme Petroleum Council to list its flagship Murban crude oil as a futures contract on an international stock exchange. Murban is a highly prized grade of crude oil that accounts for about half of the UAE's total oil output of about 3 million barrels per day.[10]
A joint venture between ADNOC and the Abu Dhabi Developmental Holding Company (ADQ) was launched in July 2020 to invest in chemicals projects in the planned Ruwais Derivatives Park. ADNOC will have a 60% stake while ADQ will hold a 40% share.[11]
In December 2021, ADNOC and Abu Dhabi National Energy Company PJSC (TAQA) announced a $3.6 billion project to aim to reduce the carbon footprint of ADNOC's offshore production operations by more than 30%.[12]
In December 2022, it was announced ADNOC had acquired a 24.9% stake in Austrian integrated oil, gas, and petrochemical company, OMV.[13]
In December 2023, ADNOC agreed to acquire OCI's entire stake in ammonia and urea producer Fertiglobe for $3.62 billion.[14]
Operations
As of November 2019, the UAE holds the sixth-largest proven reserves of oil in the world at 105 billion barrels.[15] Most of these reserves are located in Abu Dhabi.[16]
ADNOC is one of the world's largest energy companies measured by both reserves and production. ADNOC has 16 subsidiary companies in upstream, midstream, and downstream stages of production.[17] ADNOC develops both onshore and offshore gas fields. The company operates two oil refineries, Ruwais Refinery and Umm Al Nar. ADNOC exports natural gas in the form of liquefied natural gas (LNG) in addition to producing supplies for local electricity and water utilities, to other domestic industries including petrochemicals plants, and for re-injection into reservoirs.[18][19][20]
Foreign direct investment
Major investments were made to ADNOC in 2019 by US asset managers BlackRock and KKR and Italian investment firm Eni. The US firms acquired about 40% of ADNOC's pipeline assets for about $4 billion while Eni SpA took a 20% stake in Abu Dhabi Oil Refining Company for over $3 billion.[21]Austria's OMV also invested about $2.8 billion, about 15% in ADNOC's refining business in partnership with Eni.[22][23]
Singapore's sovereign wealth fund GIC completed a deal with ADNOC in May 2019 that gives GIC a 6% share in ADNOC's pipeline infrastructure. The deal is valued at $600 million.[22][24]
Headquarters
ADNOC Headquarters is a skyscraper office complex located in Abu Dhabi.[25] The building incorporates energy efficiency and sustainable engineering technologies, such as a double skin façade, photovoltaic glazing, LED exterior lighting. Designed by HOK, the overall building complex consisting of more than 65 floors with an office tower, corniche club, crisis management center, a heritage museum, and other support facilities was opened in 2001.[26]
Abu Dhabi Marathon
ADNOC is the title sponsor of the ADNOC Abu Dhabi Marathon held annually in mid-December. The marathon usually begins and ends at the ADNOC Group headquarters, situated on the iconic Corniche Road in Abu Dhabi City.
Sultan Ahmed Al Jaber is the Minister of Industry and Advanced Technology in the United Arab Emirates,[27] CEO of the Abu Dhabi National Oil Company,[28] UAE special envoy for climate change,[29] and head of the COP28 climate summit.[30] Under Al Jaber's leadership, ADNOC has invested in renewable energy and carbon capture,[31][32] while also expanding its carbon business against trends in the industry, and with investments in carbon outstripping those in renewables.[33][34] Sultan is also the president of the climate change conference cop 28 which is being held in Dubai, UAE. Him and the UAE have come under fire for greenwashing.[35][36][37] Following the summit, Al Jaber announced that ADNOC would continue to invest in oil.[38]
The Supreme Petroleum Council is the highest governing body of oil, gas, and similar industry-related activities in the Abu Dhabi. The council was formed in 1988. The council is tasked with supervising all oil and gas companies that operate in Abu Dhabi and the United Arab Emirates and acts as the board of directors for ADNOC.[39]
Operating companies
ADNOC operates numerous companies with different functions, including exploration and production; processing and refining; marketing and distribution.
Exploration and production of oil and gas
ADNOC Onshore
ADNOC Onshore works onshore and in shallow coastal water. It is previously known as Abu Dhabi Company for Onshore Petroleum Operations, ADCO. ADNOC Onshore operates primarily in Abu Dhabi. The company was originally known as Petroleum Development (Trucial Coast). It received its first concession on January 11, 1939, but did not begin geological operations until after World War II. The first commercially viable oil discovery was made at Bab in 1960. In 1962, the company was renamed the Abu Dhabi Petroleum Company. Exports began to flow from the Jebel Dhanna terminal on December 14, 1963. Abu Dhabi's government acquired 25% equity in the company in 1973 and increased its stake to 60% in 1974. The company started using the name Abu Dhabi Company for Onshore Petroleum Operations, ADCO, in 1978. ADNOC Onshore's primary exports are from the Jebel Dhanna and Fujairah terminals. ADNOC have a 60% share, the remaining 40% is split (CNPC (8%), BP (10%), Total (10%), Inpex (5%), CEFC (4%) and GS Energy of South Korea (3%)).[40][41] In December 2018 ADNOC transferred China Energy's stake in onshore to China ZhenHua Oil Company, awarding the company a 4% stake.[42]
ADNOC Offshore
ADNOC Offshore is the largest offshore oil producer in Abu Dhabi. It is ADNOC's dedicated offshore arm and is responsible for the development and delivery of oil and gas resources in Abu Dhabi waters. It was formed through the consolidation of two of ADNOC's upstream oil and gas companies: Abu Dhabi Marine Area Operating Company (ADMA-OPCO) and Zakum Development Company (ZADCO). With reorganisation, and the expiry of the 65-year-old ADMA concessions, the offshore concessions are now split by fields. ADNOC 60% then the 40% is split into Upper Zakum (Exxon / INPEX), (minor fields Umm Al Dalk, Satah (Inpex 40%)), Lower Zakum (Total, ENI, ONGC, INPEX), Umm Shaif and Nasr (Total, ENI), Sarb and Umm Lulu (CEPSA, OMV).[43]
ADNOC Drilling
ADNOC Drilling is ADNOC's oldest subsidiary. It was previously known as National Drilling Company, NDC. ADNOC Drilling is the largest drilling company in the Middle East. It drills for oil both onshore and offshore in Abu Dhabi. ADNOC currently has a 95% equity in ADNOC Drilling[44][45] after energy services giant Baker Hughes, acquired a 5% stake (valued around $11 billion or AED40.4 billion) in 2018.[46]
In September 2021, ADNOC Drilling announced its intention to list another 11% of shares in the company on the Abu Dhabi Securities Exchange (ADX) through an Initial Public Offering (IPO).[47] On October 3, 2021, the company went public on the Abu Dhabi bourse, and became the most successful listing of all time in the emirate, jumping 30% on its first-ever day of trading.[48]
Al Yasat Petroleum
Al Yasat Petroleum is ADNOC's youngest operating company. It is the first joint venture between ADNOC and China National Petroleum Corporation (CNPC), established in 2014. Tayba Al Hashemi is the current CEO of Al Yasat Petroleum. Al Yasat's role is to explore oil and gas potential within the company's mandated concession areas and to develop prospective locations on behalf of the company's shareholders. ADNOC is the majority shareholder and owns 60% of the company, with CNPC owning the remaining 40%.[49]
Al Dhafra Petroleum
Al Dhafra Petroleum is an emerging upstream company that is focused on unlocking undeveloped oil and gas potential in the UAE. Al Dhafra Petroleum is a dynamic and efficient upstream company with a mandate to maximize the UAE's natural resources. Its shareholders are ADNOC, which owns 60% of the company, with Korea National Oil Corporation (KNOC) and GS Energy owning the remaining 40%.[50]
ADNOC Sour Gas
ADNOC Sour Gas is a joint $10 billion venture between ADNOC and Occidental Petroleum that is expected to extract at least one billion cubic feet of ultra-sour gas per day. On a daily basis, the project is also expected to produce 504 million cubic feet of natural gas, 33,000 barrels of condensates, and thousands of tons of natural gas liquids, and thousands of tons of sulphur granules. The Project is located in the Shah gas field about 210 kilometers west of Abu Dhabi. Half of this field's production will be used to service domestic demand in the UAE and minimize the need for gas imports. ADNOC Sour Gas is 60% owned by ADNOC with the remaining equity held by Occidental.[51][52] It is previously known as Abu Dhabi Gas Development Company Limited (Al Hosn Gas).[53]
Processing, refining and chemicals
ADNOC Gas Processing
ADNOC Gas Processing is a natural gas producer. It is formerly known as Abu Dhabi Gas Industries Limited (GASCO).[54] ADNOC owns 68 percent equity in ADNOC Gas Processing. Other shareholders are Shell Abu Dhabi with 15 percent equity, Total also with 15 percent, and Partex with 2 percent.[55] The company was established in 1975.[56][52] ADNOC introduced a new category in its enterprise HSE Awards for energy management to recognize efforts made by companies, employees and contractors. This award helps to promote energy awareness and increase the involvement and accountability of individuals.[57]
ADNOC LNG
ADNOC LNG processes and distributes liquefied petroleum gas and liquified natural gas. ADNOC Gas Processing supplies products to ADNOC LNG at Das Island where it is processed and loaded on ships for export to East Asia, especially Japan. ADNOC is the majority shareholder. Minority shares are held by Mitsui, BP, and Total.[44] It is formerly called Abu Dhabi Gas Liquefaction Co. Limited (ADGAS).[58]
ADNOC Refining
ADNOC Refining was created in 1999 to take over oil refining from ADNOC. ADNOC Refining refines crude oil and condensate, various petroleum products, and granulated sulphur.[59] It operates the Ruwais and Abu Dhabi refineries.[60] In 2015, it completed a major expansion of its Ruwais Refinery. The $10 billion project doubled the capacity of the facility. A large part of the increased output is dedicated to diesel production due to demand from Asia. Ruwais has the ability to refine 600,000 tonnes of high-quality base oils per year. These oils are used primarily for automotive lubricants.[61] It is previously known as Abu Dhabi Oil Refining Company (TAKREER).[62][63]
Fertiglobe
In September 2019 Fertiglobe was formed as a result of the merger of ADNOC Fertilizers, (established in 1980) with Dutch firm OCI's Middle East nitrogen fertilizer business. ADNOC has a 42% stake in the new business.[64][65]
ADNOC Industrial Gas
ADNOC Industrial Gas was founded in 2007. It manufactures industrial gas used in the oil, gas, and petrochemical industries. ADNOC Industrial Gas works very closely with ADNOC Gas Processing. The firm is a joint venture between ADNOC and the Linde Group of Germany. ADNOC holds 51% equity with the remainder held by Linde.[44] It is formerly known as ADNOC Linde Industrial Gases Company Limited (ELIXIER).[66]
Borouge is a manufacturer of polyolefins. It is a joint venture of ADNOC and Borealis of Austria. It was founded in 1998, and has two divisions, one based in Abu Dhabi and another based in Singapore. The company supplies polyolefin plastics (polyethylene and polypropylene). They focus on differentiated high-end applications in the Middle East and Asia Pacific with Borstar Enhanced Polyethylene produced in Abu Dhabi and the Borealis range of specialty products.[67][52][68]
Marketing and distribution
ADNOC Logistics & Services
ADNOC Logistics & Services was formed by merging ESNAAD, IRSHAD, and ADNATCO.[69] ADNOC Logistics & Services is 100% owned by ADNOC.[70] The new company has a workforce of about 4,000 people.[71]
In August 2020, Chinese company Wanhua partnered with ADNOC Logistics and Services to create AW Shipping Ltd., which owns and operates product tankers and a flotilla of very large gas carriers (VLGCs). AW Shipping delivers liquefied petroleum gas (LPG) from ADNOC and other global suppliers to Wanhua's sites in China and globally. In November 2018, a 10-year contract for (LPG) supply was forged between the companies.[72]
ADNOC Distribution
ADNOC Distribution (ADNOCDIS:UH)[73] operates hundreds of service stations across the UAE, provides bunkering services at Zayed Port, aviation fuel services at most of the country's airports, and sells its own brand of lubricants throughout the Gulf region.[44][74] In September 2020 ADNOC completed "the largest block placement of a publicly listed" company in the Gulf region valued at $1 billion. The placement, which was aimed at institutional investors, increased the subsidiary's free float to 20%.[75][76]
Abu Dhabi Crude Oil Pipeline LLC (ADCOP)
ADCOP owns an approximately 406 km pipeline that carries crude oil from an ADNOC Onshore collection center in Abu Dhabi to the Fujairah oil export terminal, which provides access to international shipping routes.[77]
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