ADNOC to Venture Into Privatization, Partnerships

Abu Dhabi National Oil Company, or ADNOC, has embarked on a major shakeup plan to privatize its services businesses, venture into oil trading and expand partnerships with strategic investors, its chief executive said on Monday.

The state firm plans to sell at least 10% of its fuel retail unit, ADNOC Distribution, in an initial public offering this year and could float up to 30% in the unit in future, CEO Sultan al-Jaber also told Reuters in an interview.

The partial privatization plan marks a major shift by the state energy company that was founded in 1971. It aims to make ADNOC more competitive and commercially focused, operating in a way that is more akin to other state-owned controlled peers.

Other Persian Gulf Arab states, such as Saudi Arabia and Oman, have also embarked on selling energy assets with the slide in oil prices. Saudi Arabia’s state-run oil giant Saudi Aramco plans to list about 5% next year.

"Although ADNOC has no plans to list the holding company, it might look at selling stakes in other service companies and would explore new ways to manage its assets," Jaber said.

“ADNOC as the holding company will continue to be wholly owned by one shareholder that is Abu Dhabi government. But anything that is currently owned by ADNOC especially companies in the services sector, are actually candidates for us to explore where we can unlock and maximize value.”

He said ADNOC aimed to sell at least 10% of ADNOC Distribution, which runs a chain of fuel stations across the UAE, and could sell up to 30% in future.

“We have not in any way considered anything more than a potential 30% in the future,” he said. “We will always continue to own a significant majority.”

ADNOC—dubbed a sleeping energy giant—has embarked on major changes since Jaber’s appointment as CEO last year, part of an economic reform drive led by Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed Al Nahyan.

ADNOC said in August it would split its offshore oil concession, due to expire in March 2018, into more than one area with new terms to boost opportunities for partnerships.

Jaber said he expected a decision on the new offshore concessions by early 2018. He said more than 14 foreign oil companies were interested in the concessions.