Adnoc and Mubadala to jointly explore downstream investments

Abu Dhabi National Oil Company and the strategic investment firm Mubadala Investment Company will explore downstream investment opportunities across the globe.

Adnoc and Mubadala on Wednesday signed a framework agreement that also builds on latter’s diverse portfolio of refining and petrochemicals assets, it said in a statement on Wednesday.

“This agreement is a natural evolution of the close relationship between Adnoc and Mubadala,” said Abdulaziz Alhajri, director of Adnoc’s downstream. “It will ensure that, in partnership, we continue to maximise value from our hydrocarbon resources, in line with the leadership’s directives of stretching the value of every barrel of oil we produce.”

The announcement is the latest in a string of deals and agreements signed by Adnoc over the first three days of the Abu Dhabi International Petroleum Exhibition and Conference being held in Abu Dhabi.

On day one, Adnoc signed an agreement with Saudi Aramco, the world’s biggest crude producing company, to explore investments in natural gas and liquefied natural gas sector as the two look to expand their revenue base.

Adnoc also signed a deal with the state-backed Indian Strategic Petroleum Reserves to store its crude at the firm’s underground oil storage facilities in India. The state producer also formalised an agreement with Uzbek company Uzbekneftegaz to provide strategic advice on upstream and downstream operations.

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As part of the latest framework agreement, Adnoc and Mubadala will explore the potential for the processing of crude oil and other hydrocarbons supplied by Adnoc, as well as potentially utilising technologies owned by Mubadala with product offtake by other Adnoc companies. This end-to-end investment model allows for the UAE to ensure the long-term security of its hydrocarbon resources, Adnoc said.

Mubadala, which manages $225 bilion in assets, owns stakes in petchems assets including Spanish Cepsa, Austrian OMV, Cosmo Oil, Parco, Nova Chemicals and Austria’s Borealis.

Adnoc and Mubadala have tied-up on investments in the past as well. Borealis, 67 per cent owned by Mubadala, owns a 40 per cent share in the capital’s biggest petchems complex, Borouge. In February 2018, Andoc awarded Cepsa a 20 per cent stake in the Sarb and Umm Lulu offshore concessions. In May, it signed a project development deal with Cepsa for a new, linear alkyl benzene facility in Andoc’s complex in Ruwais.

The state oil company, which also awarded OMV a 20 per cent stake in Sarb and Umm Lulu offshore concession, is pursuing its downstream strategy that includes a Dh165bn downstream programme concentrated in Ruwais.