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ADNOC "Embracing The Future", Says Al Jaber

Monday, November 13, 2017
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Despite the positive outlook for the international oil industry, there is an urgent need not to "ignore the shifting dynamics of the global energy mix," Dr. Sultan Al Jaber, the CEO of the Abu Dhabi National Oil Company, ADNOC, said today.

In a keynote speech to open the Abu Dhabi International Petroleum Exhibition and Conference, ADIPEC, Dr. Al Jaber added, "We must act nimbly, think creatively, and challenge our traditional business models."

" At ADNOC," he said, "we are embracing the future to create a new type of National Oil Company, an NOC that meets the needs of today, while adapting to secure tomorrow’s success."

He went on to say that, "for the first time in the history of our company, we are exploring the potential IPO of minority stakes in some of our service companies," announcing that a minority stake in ADNOC Distribution was to be floated.

"This," he said, "marks a major milestone in our history and a significant step-change in our ongoing transformation. Importantly, it also signals a new chapter in the growth and development of the UAE’s capital markets."

At a holding company level, he added, "ADNOC will always remain wholly owned by the Abu Dhabi Government."

The full text of Al Jaber’s remarks follows: "It gives me great pleasure to welcome you to the Abu Dhabi International Petroleum Exhibition and Conference. For the last two decades, ADIPEC has showcased cutting-edge advancements in technology, and introduced the latest findings from our industry’s greatest minds.

As we look ahead, we will evolve and expand ADIPEC into a platform for true thought leadership, a platform where global CEOs, many of whom are in fact here with us today can gather to navigate trends and shape the agenda for our industry’s future.

Today, as we reflect on current market conditions, we are witnessing a global economy that is energised and growing at the highest rate since 2011.

This encouraging rate of growth is driving demand for our products and moving the oil market in the right direction, which we can all agree has been undeniably reinforced by the critical role which the OPEC and non-OPEC framework agreement has played in supporting price stability.

In short, the fundamentals of the global economy are positive, the future is promising, and the state of our industry is strong.

Despite this positive outlook, we cannot ignore the shifting dynamics of the global energy mix. We must act nimbly, think creatively, and challenge our traditional business models.

At ADNOC, we are embracing the future to create a new type of National Oil Company, an NOC that meets the needs of today, while adapting to secure tomorrow’s success. To achieve this, we have set out to transform the fundamentals of our business. We have expanded our approach to partnerships as we pivot to where new growth is emerging, enhanced our capital structure to more efficiently finance our business, and revised the way we manage our portfolio of assets to unlock lasting value.

In fact, for the first time in the history of our company, we are exploring the potential IPO of minority stakes in some of our services companies.

And today ladies and gentlemen I am pleased to confirm our intention to float a minority stake in the UAE’s leading distributor of fuel, primary operator of service stations, and largest owner of retail outlets - ADNOC Distribution.

The planned IPO, to be listed on the Abu Dhabi Securities Exchange, will offer both UAE and international investors an unprecedented opportunity to invest alongside ADNOC in one of the UAE’s leading consumer brands. This marks a major milestone in our history and a significant step-change in our ongoing transformation.

Importantly, it also signals a new chapter in the growth and development of the UAE’s capital markets. And, just to be clear, ADNOC at a holding company level will always remain wholly owned by the Abu Dhabi Government.

The proposed IPO, coupled with our new approach to partnership and portfolio management, will underpin our integrated 2030 strategy, a strategy focused on unlocking the full potential of our entire value chain and aimed at delivering a more profitable upstream, a more valuable downstream and an economic, sustainable gas supply.

In Upstream, while we stay on track to expand production capacity to 3.5 million barrels per day, we are applying innovative technology to improve performance and cut drilling time by thirty percent. Our enhanced efficiency is reinforcing our position among the world’s lowest-cost producers and attracting a diverse class of international partners.

And this is clearly reflected in the unprecedented interest for the upcoming offshore concessions, which have attracted over a dozen potential partners from around the world.

In Gas, we will continue to develop our natural resources by accessing undeveloped reservoirs, tapping into vast gas caps and scaling up sour gas production, using best in class methods developed here in the UAE.

In Downstream, we plan to grow crude refining capacity by 60 percent and more than triple our petrochemical production.

This expansion will make Ruwais the single largest integrated refining and chemicals site in the world.

Once complete, we will convert almost 20 percent of our crude to chemicals, diversifying our range of higher value products and providing a natural hedge to oil price movements.

In parallel, we will also ensure that our expanded portfolio of products gain better market access by focusing on new centres of growth and diversifying our customer base. We also plan to introduce non-speculative asset-backed trading to further stretch the dollar from every barrel we produce.

All these integrated efforts will ensure that ADNOC delivers shareholder value, strengthens the UAE economy and sets a new benchmark for what success looks like in a modern energy company.

Today, we are living at a time where Artificial Intelligence is moving from science fiction to every-day reality at incredible speed, from harnessing the power of big data to the potential use of Blockchain trading platforms. Technology is a key enabler of our transformation and our sustained success.

As we adopt and apply innovation, our most critical asset is our human capital. This year, we established our Future Leaders Programme, represented by 32 of ADNOC’s brightest minds, selected from 600 self-nominated applicants. Just as past generations brought ADNOC to where it is today, this next generation of leadership will secure even greater levels of success.

Ladies and Gentlemen, in our fast evolving world, the UAE has a long history as a stable, business friendly, environment and ADNOC has a well-deserved reputation as a trusted and reliable partner. We stand ready to collaborate with everyone who shares our vision and our values.

And I am confident that through the spirit of inventive partnership, we will continue to power today’s economies and empower tomorrow’s progress."

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