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The Abu Dhabi National Oil Co. (Adnoc) on Sunday signed two new
strategic equity partnerships with Eni (Rome, Italy) and OMV
(Vienna. Austria) covering both Adnoc Refining and a new trading
joint venture (JV), which will be established by the three
partners. In one of the largest ever refinery transactions, Eni and
OMV will acquire 20% and 15% shares in Adnoc Refining respectively,
with Adnoc owning the remaining 65%. The agreement values Adnoc
Refining, which has a total refining capacity of 922,000
barrels/day, and which operates the fourth-largest single-site
refinery in the world, at an enterprise value of $19.3 billion. The
transaction is expected to close in the third quarter of this year,
subject to customary closing conditions and regulatory approvals.
As a further part and condition of this agreement, the partners
will establish a trading JV, in which Eni and OMV will own 20% and
15%, respectively. Proceeds to Adnoc from the sale are estimated to
be $5.8 billion, subject to completion adjustments. The transaction
reflects the scale and growth potential of Adnoc Refining's assets,
coupled with an advantageous location from which to supply markets
in Africa, Asia, and Europe. Further value will be created from the
new global trading JV, which, once established, will be an
international exporter of Adnoc Refining's products, with export
volumes equivalent to approximately 70% of throughput. Domestic
supply within the UAE will continue to be managed by Adnoc. Adnoc
says the partnerships will support the company as it evolves to
become a leading global downstream player, by expanding refining
and petrochemical operations at Ruwais and securing greater
downstream global market share. Adnoc's petrochemicals subsidiary
Borouge is based at Ruwais. Under the terms of the agreements,
Adnoc, Eni, and OMV's trading JV will be incorporated at Abu Dhabi
Global Markets. Physical and derivative trading will likely begin
in 2020 when all necessary processes, procedures, and systems are
in place. Once operational, the trading JV will help guide Adnoc
Refining's activity and operational decision-making with the
objective of expanding its global presence.