Abu Dhabi

UAE oil firm ADNOC may offer 20 percent stake in fuel unit

20 Nov 2017   Abu Dhabi

Abu Dhabi National Oil Co (ADNOC) said on Monday it may sell as much as a 20 percent stake in its fuel distribution unit, potentially raising up to $2.8 billion.  Analysts valued the total fuel distribution unit at between $11 billion and $14 billion in reports prepared by banks advising the firm on the planned listing, sources have told Reuters. Sponsored If ADNOC raises as much as $2.8 billion, it would be the biggest initial public offering (IPO) in the United Arab Emirates since 2007 when DP World raised nearly $5 billion, according to Thomson Reuters data. Abu Dhabi is pushing its state companies to list on the bourse, hoping to lure foreign investors with privatizations after a fall in oil prices since mid-2014 depleted […]

Abu Dhabi to boost capacity of giant Upper Zakum, Bab oil fields

14 Nov 2017   Abu Dhabi

Abu Dhabi said on Tuesday that it would increase the capacity of its giant Upper Zakum offshore oil field, one of the world’s largest, to 1 million barrels per day by 2024. An agreement for the project was signed between the government’s Abu Dhabi National Oil Co (ADNOC), Exxon Mobil of the United States and Japan’s Inpex Corp, ADNOC said. The Upper Zakum field is the second largest offshore oil field and fourth largest oil field in the world, the statement said. Previously, Abu Dhabi was pursuing a plan to boost its production capacity to 750,000 bpd by 2017-18. ADNOC also said it would upgrade operations at its onshore Bab field, increasing production capacity to 450,000 bpd by 2020 from 420,000 bpd. An engineering, procurement and construction contract for this project has been awarded to China Petroleum Engineering & Construction Corp, an affiliate of China National […]

Abu Dhabi Expands Worldwide Solar Investments

2 Oct 2017   Abu Dhabi, Solar

In May Abu Dhabi Water and Electricity Authority (ADWEA) closed a project finance agreement for the 1.17-GW Noor Abu Dhabi, a project set to be the largest independent solar plant in the world. The photovoltaic (PV) facility will cost $872m – of which $650m will be debt and $222m equity – and is slated to be operational by the second quarter of 2019. Located in Sweihan, 120 km south-east of the capital, the project is being implemented by the Sweihan PV Power Company, a consortium led by ADWEA (60 percent) alongside Japan’s Marubeni Corporation (20 percent) and China’s JinkoSolar Holding (20 percent). The May announcement comes on the heels of a power purchase agreement in March stipulating that Marubeni and JinkoSolar would construct, own, operate and maintain the PV plant under a 25-year deal. In terms of capacity, Noor will be larger than India’s 648-MW Kamuthi Solar Power Project […]

Is Abu Dhabi’s Oil Major Eyeing An Aramco Style IPO?

12 Jul 2017   Abu Dhabi

Abu Dhabi’s national oil company, ADNOC, has gotten the Saudi fever it seems. After restructuring part of its ongoing upstream business, most notably, the merger of some of its Operating JVs (OPCOs), the company now seems to have set its eyes on privatizing part of its downstream assets, with its main target being an increase in overall revenue streams and greater access to more markets. Looking at the ongoing IPO-fever in the Arab Gulf countries, especially Saudi Arabia and Oman, it is a logical step forward. The Emirates now seem to have access the same investors and markets as its competitors. ADNOC’s CEO Sultan Al Jaber stated to the press that his company is looking to float some of its services businesses and enter tie-ups with global investors. Talks already are being held with regards to possible partnerships. The ADNOC official indicated that some deals could be expected before […]

Gulf’s $24 Billion Bond Bonanza Meets Cash Need in Cheap Oil Era

Middle East international bond sales are off to the strongest ever start to a year as borrower demand for funds outstrips the firepower of local banks in an era of depressed oil prices. Hard-currency bond issuance from the six-nation Gulf Cooperation Council, which accounts for the bulk of the region’s capital markets and includes Saudi Arabia, its largest economy, more than quadrupled in the first quarter from a year earlier, according to Bloomberg data. In contrast, syndicated lending, traditionally the preferred source of capital for GCC borrowers, is having its worst year since 2010, declining 73 percent in the first three months of the year. “It is mainly the sovereigns that have issued this year and they are very conscious about not sapping liquidity in the local banking system so that access to credit to the small and medium sized companies is not hindered,” said Anita Yadav, head of […]

Are Gulf Oil Producers Falling Into The ‘Venezuela Trap’?

1 Apr 2017   Abu Dhabi, Oman

Oman has struck a deal with several banks for a $4 billion loan to be repaid in future oil deliveries. Abu Dhabi signed a contract with commodity trading giant Vitol to supply it with over half a million tons of liquefied petroleum gas annually over the next decade in exchange for an upfront payment. According to the Wall Street Journal , other Middle Eastern producers are also considering oil-for-loan schemes, desperate for cash as oil prices stubbornly refuse to go up to the levels they need. Will these producers fall into the trap that has already claimed Venezuela? The South American country that is home to the largest oil reserves in the world owes China and Russia around $50 billion . The loans were provided in exchange for crude oil deliveries that Venezuela is now struggling to make. The problem with loan-for-oil schemes is that it can cost the […]

Abu Dhabi Awards China’s CEFC 4% Of Oil Concession For $900MM

21 Feb 2017   Abu Dhabi, China

Abu Dhabi awarded a 4 percent stake in its giant onshore oil concession to CEFC China Energy Co for a fee of 3.3 billion dirhams ($900 million), state-owned Abu Dhabi National Oil Co (ADNOC) said on Monday. The stake is the last to be awarded in the concession after international energy companies including Total, BP and China’s CNPC secured stakes. ADNOC owns 60 percent of the concession. The onshore fields, operated by Abu Dhabi Company for Onshore Petroleum Operations (ADCO, have total resources estimated at between 20 billion and 30 billion barrels of oil equivalent over the term of the concession. On Sunday, CNPC secured an 8 percent stake in ADCO for about $1.8 billion. For little-known, privately run CEFC the deal, which has a term of 40 years and is […]

BP Takes Abu Dhabi Oil Field Stake for $2.2 Billion in Stock

17 Dec 2016   Abu Dhabi

BP Plc cemented its 77-year relationship with Abu Dhabi by swapping about $2.2 billion of its own shares for a stake in one of the emirate’s largest onshore oil concessions. The U.K.’s second-biggest oil group will issue new ordinary shares to pay for 10 percent of the Abu Dhabi Company for Onshore Petroleum Operations Ltd., giving the emirate a 2 percent holding in BP, the London-based company said in a statement. The agreement promises additional cash flow and revenue following a downturn that has forced the industry to slash billions of dollars of investments worldwide in the past two years. The payment in shares also helps BP preserve its own cash and maintain a balance sheet that has seen debt and leverage rise during the oil-price collapse. “The economics are good for us and for our shareholders, and for BP it brings a strategic partner,” Chief Executive Officer Bob […]

Oil prices firm as Abu Dhabi cuts exports amid soaring Asian demand

14 Dec 2016   Abu Dhabi

Oil prices were stable on Tuesday, supported by strong demand in Asia and a supply cut by Abu Dhabi as part of production curbs organized by OPEC and other exporters. But traders said the market was being pressured by investors closing financial positions that profited from strong gains the day before. International Brent LCOc1 and U.S. West Texas Intermediate (WTI) CLc1 both flirted with negative territory in early European trading. By 0945 GMT, Brent was up 26 cents at $55.95, while WTI was up 12 cents $52.95. Traders said there was significant profit-taking after oil shot to mid-2015 highs earlier this week after the Middle East-led Organization of Petroleum Exporting Countries (OPEC) and other exporters led by Russia reached a deal to cut output by almost 1.8 million barrels per day (bpd) to […]

Oil prices firm as Abu Dhabi cuts exports amid soaring Asian demand

13 Dec 2016   Abu Dhabi

Oil prices were stable on Tuesday, supported by strong demand in Asia and a supply cut by Abu Dhabi as part of production curbs organized by OPEC and other exporters. But traders said the market was being pressured by investors closing financial positions that profited from strong gains the day before. International Brent LCOc1 and U.S. West Texas Intermediate (WTI) CLc1 both flirted with negative territory in early European trading. By 0945 GMT, Brent was up 26 cents at $55.95, while WTI was up 12 cents $52.95. Traders said there was significant profit-taking after oil shot to mid-2015 highs earlier this week after the Middle East-led Organization of Petroleum Exporting Countries (OPEC) and other exporters led by Russia reached a deal to cut output by almost 1.8 million barrels per day (bpd) to […]

Abu Dhabi’s $125 Billion Empire From Pipelines to Spaceships

7 Sep 2016   Abu Dhabi

Abu Dhabi, home to 6 percent of the world’s oil reserves, plans to merge two of its largest sovereign investment funds to form an asset pool more than twice the size of Russia’s Reserve Fund and with stakes ranging from pipelines and chemicals to microchips and music. The combination of International Petroleum Investment Co. and Mubadala Development Company PJSC would have assets of about $125 billion and debt of about $42 billion. The merger is part of a strategy by Abu Dhabi, the biggest sheikhdom in the United Arab Emirates, to cut costs and consolidate holdings after the drop in crude prices. It would create a global energy business that pumps more oil than OPEC member Libya and with more assets than ConocoPhillips. IPIC has focused on energy refining and distribution, while Mubadala’s more eclectic holdings include energy production to aircraft parts. Here are some of the companies owned […]

The GCC Seeks Cohesion With Renewed Urgency

For the Gulf states, maintaining unity becomes all the more important amid economic slowdown. Click here to continue reading… Stratfor provides global awareness and guidance to individuals, governments and businesses around the world. We use a unique, intel-based approach to analyze world affairs. Copyright © 2016 Stratfor Global Intelligence, All rights reserved. Our mailing address is: P.O. Box 92529 – Austin, Texas 78709-2529, USA unsubscribe from this list update subscription preferences | forward email

IMF Chief Urges Gulf States to Raise Taxes

23 Feb 2016   Abu Dhabi, Bahrain

The head of the International Monetary Fund on Monday urged energy exporters of the Middle East to raise more taxes as governments across the region grapple with a dramatic drop in oil revenues. “These economies need to strengthen their fiscal frameworks and re-engineer their tax systems by reducing their heavy reliance on oil revenues and by boosting non-hydrocarbon sources of revenues,” Christine Lagarde said at a finance…

Moody’s: Gulf banks pressured by oil

23 Feb 2016   Abu Dhabi, Bahrain, Kuwait

Banks for members of the Gulf Cooperation Council, which includes Saudi Arabia, face pressure from low oil prices despite government support, Moody’s said. Crude oil prices continue to hold near 10-year lows as markets favor the supply side. A rally sparked by talks of a production freeze from members of the Organization of Petroleum Exporting Countries faltered by the end of last week after U.S. data showed oil inventories at historically high levels. Moody’s Investors Service reported Monday the banks for GCC members might get squeezed by dual pressures from low oil prices and dwindling options for governments looking to arrest the slide. “Despite low oil prices and a high dependency on oil revenues […]

Abu Dhabi’s Biggest Bank Says U.S. Oil Prices May Drop to $20

22 Feb 2016   Abu Dhabi, Prices

Oil prices may drop to near $20 a barrel this year as the global glut of crude persists into 2017, Abu Dhabi’s largest lender said. U.S. benchmark West Texas Intermediate crude should trade in a range between $25 a barrel and $45 a barrel for the rest of the year, “although a very brief spike down towards $20 is possible,” the National Bank of Abu Dhabi PJSC wrote in its Global Investment Outlook 2016 report on Sunday. Prices at the lower end of the range will stimulate demand growth, it said. “For at least the next few years there do appear to be solid fundamental reasons why oil prices are likely to remain in a trading range,” NBAD analysts wrote in the report. Producers have sold less of their crude this year through forward transactions than in past years, and forward-selling would likely accelerate if prices rallied much above […]

Gloom descends on Gulf as oil price slump hits economy

A caustic slogan is doing the rounds on social networks in the Gulf states this festive season: “All I want for Christmas is for oil prices to go up.”  Gloom has descended on the region amid an oil price rout that has halved the price of crude over 18 months and wiped $360bn off export earnings just this past year.  State contractors, the property sector and even foreign investors have all felt the pain as the slump pushes governments to cut back spending.  “2015 has been a difficult year, but this is just the beginning of a multiyear adjustment process: 2016 will be just as tough, and then there is 2017 and 2018,” says Masood Ahmed, the International Monetary Fund director for the Gulf region. “Next year the slowdown is not going to ease up.”  Swingeing spending cuts have unnerved private businesses in Saudi Arabia, the region’s largest economy, and elsewhere — as well as undermining the policy of government largesse long used to defuse social tensions.

When Abu Dhabi Resembles Frontier Market You Know Oil Hurts

8 Dec 2015   Abu Dhabi

You would have to go back to the 2008 financial crisis to find the last time markets in the Gulf took a hit like this. Oil’s plunge to almost $40 a barrel is roiling the six-nation Gulf Cooperation Council, throwing government spending plans into disarray, sapping stock trading and valuations, driving up bank borrowing costs and stoking speculation some nations will eventually scrap long-established currency pegs. The GCC, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, is home to about 29 percent of the world’s oil reserves. Equities in all those markets tumbled on Tuesday after Brent crude dropped to the lowest since 2009 this week. Here’s a look at some of the pressure points: Stocks at Frontier Prices Abu Dhabi stock valuations have fallen below MSCI frontier markets, while Dubai shares are closing the gap. About $200 billion has been wiped off the […]

Israel soon to open Abu Dhabi office for renewable energy

27 Nov 2015   Abu Dhabi, Israel

Israel’s Foreign Ministry says the country will soon open an office at a renewable energy agency in Abu Dhabi, the United Arab Emirates’ capital – even though the two nations have no diplomatic relations. Ministry spokesman Emmanuel Nahshon said Friday the office will be accredited to IRENA, the International Renewable Energy Agency. Like much of the Arab world, the UAE has no diplomatic relations with Israel and Israeli passport holders are barred from entering the Emirates. However, IRENA has been part of a rapprochement between Israel and the UAE before. In 2010, then-Israeli National Infrastructure Minister Uzi Landau attended an IRENA conference in Abu Dhabi , becoming the first Cabinet-level official to visit the Emirates. Officials at IRENA and the Emirati government could not be immediately reached for comment.

Strong Dubai crude oil trades skew Asia price benchmark

18 Aug 2015   Abu Dhabi, China

Record trading of Dubai crude by two Chinese state companies this month on a decades-old oil pricing system has pushed the benchmark higher, even as other grades are being pressed lower by a global glut. The strong Dubai trade has forced Middle East producers to raise official selling prices (OSPs), driving Asian buyers to seek cheaper oil elsewhere or cut refinery runs due to low margins. Chinaoil and Unipec, trading units of PetroChina and Sinopec, respectively, traded record volumes of crude in early August on pricing agency Platts’ market assessment process. This pushed up prompt physical Dubai prices against future months, creating a backwardated market structure usually associated with supply shortages. In contrast, a global oil glut has kept Brent and West Texas Intermediate (WTI) crude futures in contango this year, and most analysts […]

Abu Dhabi Wealth Fund Changing Tack Amid Lower Oil Prices

2 Jun 2015   Abu Dhabi

The Abu Dhabi Investment Authority, a sovereign-wealth fund with assets estimated at more than $700 billion, is relying less on external money managers and handling more of its investments in-house as its owner grapples with lower oil prices. Funded by excess revenue from the government of Abu Dhabi, a major Persian Gulf oil producer, ADIA was managing 35% of its money in-house in 2014, compared with 25% in the previous year, according to an annual review released Tuesday. Investors watch ADIA’s allocations and money-management strategies carefully because of the effect a shift by a fund its size could potentially have on asset prices. The change reflected growth in internal expertise in recent years, the fund’s managing director, Sheikh Hamed Bin Zayed Al Nahyan, said in a letter accompanying the report. “While this work is now nearing its conclusion, we will continue to recruit selectively in 2015,” Sheikh Hamed said. […]

Abu Dhabi to invest over $25 billion in offshore oilfields -ADNOC official

21 Apr 2015   Abu Dhabi

Abu Dhabi plans to invest over $25 billion in the next five years on boosting its oil production capacity from offshore fields, a senior official of Abu Dhabi National Oil Co said on Tuesday. The plan is part of the United Arab Emirates’ strategy of increasing its crude oil output potential to 3.5 million barrels per day by 2017-18. “We want to build ‎capacity from production and from number of wells and infrastructure. Our current plan as ADNOC (is to reach) 3.5 million bpd and to sustain it,” Qasem al-Kayoumi, manager of ADNOC’s offshore division of the exploration and production directorate, told reporters. He also said the investment plan for offshore drilling activities was $2.5 billion per year. (Reporting by Rania El Gamal; Writing by Andrew Torchia )

Bahrain joins Emirates in sending fighter planes to Jordan

16 Feb 2015   Abu Dhabi, Bahrain, Jordan

The Gulf island nation of Bahrain says it has deployed fighter planes to Jordan, a day after it announced plans to send troops to the kingdom. Bahrain’s brief statement early Monday said the planes would “participate in the international efforts aiming to eliminate terrorism.” It did not provide details, and military officials could not immediately be reached for comment. Bahrain is home to the U.S. Navy’s 5th Fleet and like Jordan is part of the U.S.-led coalition carrying out airstrikes against the Islamic State militant group. Gulf neighbor the United Arab Emirates previously deployed a squadron of F-16 fighters to Jordan. Bahraini King Hamad bin Isa Al Khalifa visited Jordan last week, and his government on Sunday announced it was sending an unspecified number of troops to help support Jordan.

Total Wins Stake in Abu Dhabi’s Top Onshore Oil Fields

29 Jan 2015   Abu Dhabi

 Total SA won bidding to develop the biggest onshore oil deposits in the United Arab Emirates, making the French energy company the first to be chosen by Abu Dhabi to pump more crude amid a global supply glut. Abu Dhabi National Oil Co. awarded Total 10 percent of the main land-based concession in the U.A.E.’s largest sheikhdom, for 40 years starting Jan. 1, 2015, the Paris-based company said in an e-mailed statement on Thursday. Adnoc, as the government-owned producer is known, confirmed the award and said it will name other partners “soon.” Total’s stake would account for oil output generating $2.83 billion a year based on yesterday’s closing Brent price of $48.47 a barrel. Middle Eastern energy suppliers including the U.A.E. are expanding their capacity to produce crude for export as well as to boost output of natural gas, which they burn as fuel in local power […]

As Abu Dhabi Sizes Up Oil Partners, Western Firms Risk Being Left Out

30 Oct 2014   Abu Dhabi

Abu Dhabi, the largest and wealthiest member among the seven states in the United Arab Emirates, is shaking up its oil industry . It has allowed the expiration of some longstanding concessions to major Western oil companies and is considering replacing at least some of them with partners from Asia and elsewhere. For more than seven decades, the Abu Dhabi National Oil Company, also known as Adnoc, shared the operation of Abu Dhabi’s oil fields, the biggest onshore producers in the United Arab Emirates, with companies including Exxon Mobil , Royal Dutch Shell, Total and BP , under the umbrella of the Abu Dhabi Company for Onshore Oil Operations. The concessions, for 75 years, expired in January, but Abu Dhabi has yet to say which of the Western companies will have their rights renewed. There are also likely to be new entrants, possibly including […]

Abu Dhabi to Operate Main Onshore Oil Fields Alone

9 Jan 2014   Abu Dhabi

Abu Dhabi said it would continue to produce and market crude alone from its main onshore oil fields after a shared license to run the fields expires later this month. State-run Abu Dhabi National Oil Co., known as Adnoc, said Wednesday it wouldn’t renew its 75-year oil-production agreement with BP P4 […]