SINGAPORE (ICIS)--The Abu Dhabi National Company (ADNOC) is taking in Italian Eni and Austrian OMV as strategic partners in its refining subsidiary, with a further plan to set up a trading joint venture, the UAE-based energy firm said over the weekend.
Under the deal, Eni will have a 20% stake in ADNOC Refining, formerly known as Takreer, while OMV will have a 15% stake, with ADNOC holding the remaining 65%, ADNOC said in a statement dated 27 January.
The transaction, which is still subject to regulatory approvals, is expected to close in the third quarter.
Total proceeds from the stake sale are estimated at $5.8bn. ADNOC Refining supplies to markets in Africa, Asia and Europe.
ADNOC Refining has a total refining capacity of 922,000 bbl/day and operates the fourth largest single site refinery in the world.
The deal values the company at $19.3bn, according to its parent firm.
“These innovative partnerships will support our ambition of becoming an international downstream leader with the flexibility to respond quickly to shifting market needs and dynamics,” ADNOC CEO Ahmed Al Jaber said.
“They will help enable our objective of unlocking even more value from every barrel of oil we produce,” he said.
A joint venture trading company with the same equity structure as ADNOC Refining’s would also be formed.
It will be in charge of exporting the refining company’s products, while domestic supply to the UAE will continue to be managed by ADNOC.
The trading joint venture will be incorporated at Abu Dhabi Global Markets, with physical and derivative trading likely to begin in 2020, ADNOC said.
“This transaction … 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,” Eni CEO Claudio Descalzi said in the statement issued by ADNOC.
“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 oil value chain, spanning from upstream production to refining & trading and petrochemicals,” OMV chairman Rainer Seele said.