The Abu Dhabi National Oil Company (ADNOC) has agreed to award stakes of 20% and 15% in ADNOC Refining to Eni and OMV, respectively, for a total sum of $5.8bn.
ADNOC Refining, which was created in 1999 as a separate entity, is engaged in crude oil and condensate refining, and supply of petroleum products. The Abu Dhabi-based refining company operates the Ruwais East and Ruwais West refineries in Ruwais and also the Abu Dhabi Refinery.
ADNOC will retain the remaining stake of 65% in the refining company, which has a total refining capacity of 922,000 barrels per day.
Eni will buy the 20% stake in the refining business for about $3.3bn while OMV will acquire its stake for about $2.5bn.
Eni CEO Claudio Descalzi said: “This transaction, which allows us to enter the United Arab Emirates’ downstream sector and represents a 35% increase in Eni’s global refining capacity, 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.”
The two transactions give an enterprise value of $19.3bn to ADNOC Refining, which has a workforce of around 4,700 people.
In addition to the transactions, the three partners will also set up a trading joint venture with similar stakes as they would own in the refining business.
ADNOC said that the partnerships with the Italian and Austrian firms will help in growing refining and petrochemical operations at the Ruwais refinery and in capturing greater downstream global market share.
OMV downstream board member Manfred Leitner said: “This partnership is a strategic cornerstone for OMV Downstream. With a share in ADNOC Refining, including the world-class, refinery complex in Ruwais, Abu Dhabi becomes our first core position outside of Europe, at the doorstep of global growth markets in Asia.
“Upon closing, we immediately grow our refining capacity by 40% and our olefin capacity by 10%.”
Subject to customary closing conditions and receipt of regulatory approvals, the transactions are expected to be completed in the third quarter of 2019.
In February 2018, ADNOC announced an investment of $3.1bn to upgrade the Ruwais oil refinery. Under the refinery upgrade project, dubbed Crude Flexibility Project (CFP), ADNOC plans to add crude processing flexibility and free up more Murban grade crude.