ADNOC gets SPC nod for $109bn investments plan

ADNOC gets SPC nod for $109bn investments plan
The SPC is the highest governing body of the oil and gas industry in Abu Dhabi. The council formulates, approves and oversees the implementation of Abu Dhabi's petroleum policy and follows up its implementation across all areas of the energy industry of the UAE.
Published: 3 December 2017 - 7:10 a.m.
By: Indrajit Sen

Abu Dhabi’s Supreme Petroleum Council (SPC), presided over by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces and Vice-Chairman of the SPC, has approved ADNOC’s key strategic investments programme and future opportunities.

The Emirati oil giant is looking to expand its 2030 strategy, aimed at unlocking, creating and maximising value and ensuring smart growth in its upstream, and downstream businesses, while strengthening market access.

The SPC approved ADNOC’s plans for capital expenditure of over AED 400bn or $109bn, over the next five years, as it embarks on its upstream and downstream expansion and growth projects. The SPC also approved ADNOC’s plans to explore and appraise Abu Dhabi’s unconventional gas resources, as the company seeks to enable future value creation from its untapped gas resources.

The SPC meeting comes at a time when ADNOC has decided to publicly list shares of its retail arm. ADNOC recently confirmed plans to offer a minimum 10% stake, or 1.25bn shares, and a maximum 20% stake, or 2.5bn shares, in the partial IPO of ADNOC Distribution, its fuel distribution unit.

An indicative price range of between AED 2.35 and AED 2.95 per share, has been set. At the top of the range, the IPO would be the largest in the UAE since DP World was floated, a decade ago.

The proposed ADNOC Distribution IPO, which will be the first time ADNOC has placed shares of one of its subsidiary companies onto the public markets, will offer both UAE and international investors the opportunity to invest alongside ADNOC in one of the region’s leading retail brands.

“In line with the SPC’s directives, over the coming years, we will make strategic, commercially-driven and targeted investments, across our entire value chain, aimed at maximising existing resources, while also identifying and developing new, value-enhancing opportunities. We will continue to strengthen our resilience to the changing energy landscape, while remaining focused on managing our unit cost and driving performance, profitability and efficiency across our business.” Dr Sultan Al Jaber, Minister of State and ADNOC group CEO, said.

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