Eni and ADNOC have today signed an agreement (Share Purchase Agreement) that allows Eni to acquire from ADNOC the share of 20% of the company ADNOC Refining. At the signing of the agreement were present His Majesty the Sheikh Mohamed bin Zayed Al Nahyan, Prince of the Crown of Abu Dhabi and Deputy Supreme Commander of the Armed forces of the United Arab Emirates, and Giuseppe Conte, President of the Italian Council. The agreement was signed by His Excellency Sultan Ahmed Al Jaber, Minister of State of the United Arab Emirates and CEO of ADNOC, and Claudio Descalzi, CEO of Eni.
At the same time, ADNOC announced that it had sold the 15% stake in ADNOC Refining to OMV, thus remaining the holder of the 65% stake.
ADNOC, Eni and OMV have also agreed to set up a joint venture dedicated to the marketing of petroleum products with the same shareholdings established for ADNOC Refining.
The terms agreed for the acquisition by Eni of the units of 20% imply a cash consideration of approximately 3,3 billion dollars net of the net debt and subject to adjustments at the time of closing, an amount that corresponds to a company value ( enterprise value) equal to approximately 3,9 billion dollars (Eni share). The completion of the acquisition is subject to the occurrence of certain conditions precedent, including the authorization by the United Arab Emirates to other regulatory authorities.
The one signed today is one of the most significant operations ever conducted in the refining sector and reflects the size, quality and growth potential of the assets of ADNOC Refining, together with the geographical position that allows it to supply the markets of Africa, Asia and Europe . ADNOC Refining operates three refineries, located in the Ruwais (Ruwais East and Ruwais West) and Abu Dhabi (Abu Dhabi Refinery) areas, with a total refining capacity that exceeds 900 thousand barrels per day.
The Ruwais refining complex is the fourth in the world in terms of production capacity and guarantees a high level of conversion thanks to the adoption of the best available technologies and a very high conversion process scheme. The industrial complex has already proved to have a resilient refining margin, thanks to important competitive advantages in terms of integration, economies of scale, complexity and efficiency of the plants, proximity to the upstream deposits (which supply crude oil and the supply of natural gas). ) and a barycentric position with respect to the eastern and western markets. Furthermore, a development plan has been defined to increase the competitiveness and profitability of the complex by increasing the flexibility of the selection of processable crudes and energy efficiency.
Eni will contribute to the technological development of the plants, having already developed, in its European refineries, a wide experience in managing the processes used by Adnoc Refining (such as those related to fluidized catalytic cracking, hydrocracking, conversion and desulphurisation of residues , to cocking and others) and in optimization actions aimed at maximizing the margin of refined barrels. The transaction will allow Eni to further strengthen the resilience of its refining business, reducing the target for the breakeven of the refining margin of 50%, to about 1,5 dollars per barrel.
Furthermore, Eni and OMV will join ADNOC in setting up a new Joint Venture dedicated to the marketing of petroleum products, with the same shareholding as established for ADNOC Refining, creating further value. Once established, the Joint Venture will export the ADNOC Refining products internationally, for a volume equal to 70% of the total production. Domestic supplies in the United Arab Emirates will continue to be managed by ADNOC.
His Excellency Sultan Ahmed Al Jaber, Minister of State of the United Arab Emirates and CEO of ADNOC commented: "We are pleased with this partnership with Eni and OMV in our refining business and in the new trading company. This partnership is part of our vision aimed at creating and addressing ever greater value in the various areas of our business. This innovative partnership supports us in our ambition to become a leader in downstream, with a flexibility that enables us to respond quickly to changes in market demands and dynamics. Partners will help us achieve our goal of creating more and more value from every single barrel we produce. Working together with our partners, we will generate additional efficiency in operations, improving the performance of our assets and our business ".
The CEO of Eni, Claudio Descalzi, commented: "These agreements consolidate our strong partnership with ADNOC. In less than a year, we have been able to create a hub with upstream excellence and an efficient, large refining capacity with additional growth potential. This transaction, which allows us to enter the United Arab Emirates downstream sector and represents an increase of 35% of its refining capacity for Eni, is in line with our strategy aimed at making Eni's portfolio more diversified from the point of geographic view, more balanced along the value chain, more efficient and more resilient compared to market volatility ".
Eni is present in the upstream sector of the United Arab Emirates from March 2018, when it was awarded by ADNOC the 10% of the concessions of Umm Shaif and Nasr and the 5% of that of Lower Zakum, followed in November of the same year from the assignment 25% of the concession of Ghasha, mega offshore project of ADNOC. The 12 last January, Eni was awarded the 70% in the offshore exploration concessions called Block 1 and Block 2.
Eni in the Middle East, as well as in the United Arab Emirates, is also present in Oman, Bahrain, Lebanon and Iraq.