UAE’s Oil Giant Looks To List Drilling Business In Local IPO

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By Charles Kennedy

Abu Dhabi National Oil Company (ADNOC) is talking to banks about the potential listing of its oil drilling unit on the local stock exchange, Reuters reported on Thursday, quoting three sources with knowledge of the plan.

ADNOC Drilling is the largest drilling company in the Middle East, it says, and operates 63 onshore rigs, 20 offshore jackup rigs, and 11 island rigs. ADNOC Drilling provides drilling rigs and associated services to companies part of the ADNOC Group, and helps the oil firm of OPEC member the United Arab Emirates (UAE) to reach its production targets, the drilling firm says.

According to two of Reuters’ sources, ADNOC would like to have the initial public offering (IPO) take place this year. The size of the offering could be larger than US$1 billion, one source told Reuters, but added that the talks with the banks were at their early stages.

In recent years, ADNOC has moved to monetize some of its assets and resources by listing its distribution business, selling a minority stake in its pipelines business, and entering in joint ventures in the upstream and downstream.

In December 2017, ADNOC listed its fuel retail unit ADNOC Distribution on the Abu Dhabi Securities Exchange, setting an IPO offer price that valued the unit at US$8.5 billion.

Last year, after oil prices crashed and OPEC+, including the UAE, had to curtail massive production volumes to rebalance the market and prop up oil prices, ADNOC announced a US$20.7-billion deal with six international companies for the acquisition of a minority stake in ADNOC Gas Pipeline Assets.

Under the terms of the deal, Global Infrastructure Partners, Brookfield Asset Management, Singapore’s sovereign wealth fund, the Ontario Teachers’ Pension Plan Board, Snam, and NH Investment and Securities will acquire a 49-percent interest in ADNOC Gas Pipeline Assets, a new subsidiary of the UAE’s national oil and gas company.

Crude Oil

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