UAE - Mubasher: The Abu Dhabi National Oil Company (ADNOC) on Monday announced it has entered a new strategic partnership with the Netherland-based chemical industry company OCI N.V (OCI).
Upon the partnership, both companies will form a new joint venture (JV) by combining the business of ADNOC Fertilizers, ADNOC’s fertiliser unit, with OCI’s MENA nitrogen fertiliser platform, according to a press release.
ADNOC will hold a 42% stake in the JV, while OCI will own a 58% stake, Abu Dhabi’s oil and gas giant said.
Based on 2018 pro forma figures, the two companies are expected to generate annual revenues of $1.74 billion for the combined entity.
This JV will be the largest global export-focused nitrogen fertiliser platform and MENA’s largest producer.
The new JV has a production capacity of 5 million tonnes of urea and 1.5 million tonnes of sellable ammonia.
This combination will be set up in a strong position to pay its shareholders attractive dividends and to fund future organic and inorganic growth opportunities.
In the same vein, ADNOC Fertilizers has also signed a new long-term gas supply agreement with ADNOC, upon which it will cater the required feedstock for its operations to its facilities in Ruwais.
The JV will be built in Abu Dhabi and registered in the Emirate’s international financial center, Abu Dhabi Global Market (ADGM), with a board consisting of six members nominated by OCI and four nominated by ADNOC.
The UAE minister of state and CEO of the ADNOC Group Sultan Ahmed Al Jaber will be chairman of the board and Egyptian billionaire Nassef Sawiris be the CEO of the JV, alongside his current role as CEO of OCI.
Al Jaber said: “This unique business combination is in line with ADNOC’s approach to value-added partnerships and will improve the profitability and cash flow of our fertiliser portfolio.”
“It also supports ADNOC’s objectives to attract investors to Ruwais by leveraging its strategic location, world-class logistics and the UAE’s abundant gas resources at commercially attractive terms. It is another milestone in the delivery of ADNOC’s 2030 strategy and our ambitions to expand ADNOC’s Downstream portfolio,” he added.
On Sunday, Bloomberg News reported that ADNOC and OCI are considering combining their Middle Eastern fertiliser businesses.
“This partnership creates a first-of-its-kind export platform with best-in-class cash conversion metrics. I believe that this platform has significant potential for future growth and value creation, with the support and under the guidance of its two key shareholders,” Nassef Sawiris, CEO of OCI N.V. commented.
