Latest news with #AbuDhabiNationalOilCo
The Star
14 hours ago
- Business
- The Star
Even Big Oil thinks Big Oil is getting too risky these days
What's an oil producer to do when it sees its core product under threat from declining demand and a war-torn neighbourhood? Just ask Abu Dhabi National Oil Co. The US$19bil all-cash bid for Australian gas producer Santos Ltd on Monday, from a consortium led by the state-owned United Arab Emirates (UAE) business also known as Adnoc, is one answer to the question. Adnoc has been on a shopping spree for gas assets in recent years. In common with its far larger peer Saudi Arabian Oil Co, which is currently spending more money developing new gas fields than crude reserves, it's been gradually transforming itself from a business that lives and dies on black gold, to one that cares as much about liquefied natural gas (LNG) ships as oil tankers. Just look at the list of deals made and mooted lately. Last May, it bought a stake in NextDecade Corp's liquefied natural gas export project in Texas. In April, people familiar with the matter told Bloomberg News it was considering a US$9bil bid for Aethon Energy Management's gas assets in Texas and Louisiana. It's also interested in buying BP Plc's gas assets in a potential breakup, Bloomberg News reported last week. In 2023, Adnoc spun off its own gas business and floated it on the Abu Dhabi stock exchange, where it makes up about one-seventh of the market. Last year, it started building an export terminal at Ruwais in the west of the country, a huge complex sufficient to meet all of Turkey's needs for imported LNG. In an environment where Israel's attack on Iran is ratcheting up the risk of all-out war in the region, there are several advantages to this strategy. For one thing, there's the perennial fear that Tehran, if pushed to the brink, may start creating problems in the Strait of Hormuz. The narrow stretch of water is guarded by Iran, Oman, and the UAE. Sustained attacks on shipping haven't happened since the 1980s Iran-Iraq war, not least because Iran's export revenues would suffer quite as much as its enemies'. It's still prudent to minimise the risk from such a weak point, though, in case a cornered Iranian government reaches for desperate measures. We're facing a world where oil demand is looking distinctly shaky, with crude production still sitting below the peak it hit back in 2018. Gas isn't doing that much better, with growth slowing well below historic rates thanks to the collapse in Russian pipeline exports since the 2022 invasion of Ukraine and a rising price that's deterring potential buyers in developing Asia and Africa. The segment of gas that's traded as LNG, however, has been a winner, with the capacity of liquefaction plants set to increase by about 40% between now and 2030. Maritime straits, like gas pipelines, are highly vulnerable to geopolitical meddling. If you can buy LNG assets that aren't exposed to Middle Eastern wars, however, you can avoid both the chronic decline in conventional petroleum demand, and the acute risks of conflict-driven supply shocks. These days, such assets aren't as abundant as a cash-rich national oil company might hope. Santos shares closed at a roughly 13% discount to Adnoc's cash offer on Monday, which has already been recommended by the target's board. Given the open-and-shut nature of the proposal, that's likely to reflect worries that Australia's Foreign Investment Review Board won't like the idea of a state-owned company that doesn't even publish financial statements buying the country's second-biggest petroleum business. It's still more likely to get over the line than other options out there. President Donald Trump was happy to boast about the deals struck with UAE businesses during his trip to the Middle East last month – but if you want an outright takeover, the United States in its current nativist mood probably isn't the best place to be looking. The final agreement over the sale of United States Steel Corp to Nippon Steel Corp, giving the US government a golden share that would allow it to dictate corporate policies, is an indicator of where things are headed. Other prospective regions such as South America, Central Asia and sub-Saharan Africa are already largely locked up by state-owned and independent oil companies. Europe's North Sea is in inexorable decline. Pickings are looking slim. The UAE is better placed than many to ride out the transition away from fossil fuels. Its vibrant non-oil economy means it can balance its budget and current account at the lowest crude prices in the Gulf. Only Qatar and Turkmenistan, among major petroleum exporters, do better – and each is essentially a gas producer, not an oil state. Eking out future revenues as the world's hunger for oil and gas declines is going to require emulating them, rather than the UAE's more oil-rich neighbours. — Bloomberg David Fickling is a Bloomberg Opinion columnist. The views expressed here are the writer's own.
Business Times
3 days ago
- Business
- Business Times
Even Big Oil thinks Big Oil is too risky these days
WHAT is an oil producer to do when it sees its core product under threat from declining demand and a war-torn neighbourhood? Just ask Abu Dhabi National Oil Co (Adnoc). The US$19 billion all-cash bid for Australian gas producer Santos on Monday (Jun 16) from a consortium led by the state-owned United Arab Emirates business is one answer to the question. Adnoc has been on a shopping spree for gas assets in recent years. In common with its far larger peer Saudi Arabian Oil Co, which is currently spending more money developing new gas fields than crude reserves, it has been gradually transforming itself from a business that lives and dies on black gold, to one that cares as much about liquefied natural gas (LNG) ships as oil tankers. Just look at the list of deals made and mooted lately. Last May, it bought a stake in NextDecade Corp's LNG export project in Texas. In April, people familiar with the matter told Bloomberg News it was considering a US$9 billion bid for Aethon Energy Management's gas assets in Texas and Louisiana. It is also interested in buying BP's gas assets in a potential break-up, Bloomberg News reported last week. In 2023, Adnoc spun off its own gas business and floated it on the Abu Dhabi stock exchange, where it makes up about one-seventh of the market. Last year, it started building an export terminal at Ruwais in the west of the country, a huge complex sufficient to meet all of Turkey's needs for imported LNG. In an environment where Israel's attack on Iran is ratcheting up the risk of all-out war in the region, there are several advantages to this strategy. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up For one thing, there is the perennial fear that Tehran, if pushed to the brink, may start creating problems in the Strait of Hormuz. The narrow stretch of water is guarded by Iran, Oman and the UAE. Sustained attacks on shipping have not happened since the 1980s Iran-Iraq war, not least because Iran's export revenues would suffer quite as much as its enemies'. It is still prudent to minimise the risk from such a weak point, though, in case a cornered Iranian government reaches for desperate measures. We are facing a world where oil demand is looking distinctly shaky, with crude production still sitting below the peak it hit back in 2018. Gas is not doing that much better, with growth slowing well below historic rates thanks to the collapse in Russian pipeline exports since the 2022 invasion of Ukraine and a rising price that is deterring potential buyers in developing Asia and Africa. The segment of gas that is traded as LNG, however, has been a winner, with the capacity of liquefaction plants set to increase by about 40 per cent between now and 2030. Maritime straits, like gas pipelines, are highly vulnerable to geopolitical meddling. If you can buy LNG assets that are not exposed to Middle Eastern wars, however, you can avoid both the chronic decline in conventional petroleum demand and the acute risks of conflict-driven supply shocks. These days, such assets are not as abundant as a cash-rich national oil company might hope. Santos shares on Monday closed at a roughly 13 per cent discount to Adnoc's cash offer, which has already been recommended by the target's board. Given the open-and-shut nature of the proposal, that is likely to reflect worries that Australia's Foreign Investment Review Board will not like the idea of a state-owned company that does not even publish financial statements buying the country's second-biggest petroleum business. It is still more likely to get over the line than other options out there. President Donald Trump was happy to boast about the deals struck with UAE businesses during his trip to the Middle East last month – but if you want an outright takeover, the US in its current nativist mood probably is not the best place to be looking. The final agreement over the sale of US Steel Corp to Nippon Steel Corp, giving the US government a golden share that would allow it to dictate corporate policies, is an indicator of where things are headed. Other prospective regions such as South America, Central Asia and sub-Saharan Africa are already largely locked up by state-owned and independent oil companies. Europe's North Sea is in inexorable decline. Pickings are looking slim. The UAE is better placed than many to ride out the transition away from fossil fuels. Its vibrant non-oil economy means it can balance its Budget and current account at the lowest crude prices in the Gulf. Only Qatar and Turkmenistan, among major petroleum exporters, do better – and each is essentially a gas producer, not an oil state. Eking out future revenues as the world's hunger for oil and gas declines is going to require emulating them, rather than the UAE's more oil-rich neighbours. BLOOMBERG
Bloomberg
5 days ago
- Business
- Bloomberg
Santos, Adnoc Poised to Report A$30 Billion Deal, AFR Says
Abu Dhabi National Oil Co. has agreed terms for a A$30 billion ($19 billion) takeover of Santos Ltd., the Australian Financial Review reported, without citing anyone. The deal is expected to be announced Monday morning, the newspaper said.
Business Journals
16-05-2025
- Business
- Business Journals
Occidental may gain ADNOC as investor in South Texas DAC Hub
The latest development comes after years of discussions between Occidental Petroleum and United Arab Emirates-based Abu Dhabi National Oil Co.
The Star
07-05-2025
- Business
- The Star
Gulf states working on US$6bil in Africa energy deals
Dubai: Middle East countries have shown interest in or completed deals for at least US$6bil of African energy assets in recent weeks, demonstrating a larger investment appetite on the continent by the region. Abu Dhabi National Oil Co is among companies shortlisted to buy Shell Plc's downstream assets in South Africa valued at about US$1bil, people familiar with the deal said last month. Adnoc and other companies in the United Arab Emirates have expressed interest across the breadth of Africa's energy sector in a matter of weeks. Gulf states have ramped up investment in energy projects on the continent ranging from renewable plants to oil fields in recent years. Bilateral trade between Africa and the United Arab Emirates increased 38% in the two years through 2023 to US$86bil , according to an African Export-Import Bank report. The Gulf nations are diversifying their oil and gas industries by adding 'assets and investments in other jurisdictions that can help smooth out cyclical curves and localised market fluctuations', said Andrew Farrand, Middle East and North Africa director for Horizon Engage, a political risk consultancy. 'African countries offer great opportunities in this regard.' Dubai-based Alpha MBM Investments LLC, a private investment office led by a member of the Dubai royal family, signed an agreement with Uganda to build a 60,000 barrel a day refinery and hold a 60% stake in the business, the nation's presidency said in a March 30 statement. A deal for the US$4bil project follows a number of failed attempts to build a domestic refinery that will utilise crude discovered in landlocked fields. Alpha MBM didn't respond to emails seeking comment. Such arrangements offer a welcome change for governments to deal with partners who are already resource-rich, 'rather than primarily focusing on resource extraction to serve their home economies', Farrand said. Kenya renewed a contract to buy fuel on credit for two more years from Adnoc, Saudi Aramco and Emirates National Oil Co that the country credits with helping to stabilise the currency. Some of the imports are shipped on to markets in South Sudan, the Democratic Republic of Congo and Burundi. — Bloomberg
