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Abu Dhabi National Oil Company
(ADNOC)
Native name
شركة بترول أبوظبي الوطنية
Company typeGovernment owned corporation
IndustryOil and gas
Founded1971 (restructured in 1988)
Headquarters
Abu Dhabi
,
United Arab Emirates
Key people
Khalifa bin Zayed Al Nahyan (Chairman of the Supreme Petroleum Council)
Sultan Ahmed Al Jaber (Director-General and CEO)
Productscrude oil
oil products
natural gas
Petrochemicals
RevenueUS$60 billion (2014)
OwnerUAE government
Number of employees
25,000 (2011)
Websitewww.adnoc.ae

The Abu Dhabi National Oil Company (Arabic: شركة بترول أبوظبي الوطنية) or ADNOC is the state-owned oil company of the United Arab Emirates (UAE). According to the Oil & Gas Journal, as of January 2015, the UAE holds the seventh-largest proven reserves of oil in the world at 97.8 billion barrels. Most of these reserves are located in Abu Dhabi.[1] It is the world's 11th largest oil company by production, standing at 3.1 million barrels per day.[2] It is the UAE's biggest company.[3]

History

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The Petroleum Development in Trucial Coast, Limited (PDTC) was founded in 1935 by Anglo-Persian Oil (now known as BP), Shell, Compagnie Francaise de Pétroles (CFP, now known at Total), Exxon, and Mobil. These firms were the partners behind the Iraq Petroleum Company formed in 1928. The PDTC was granted a 75-year concession for the rights to explore for and extract oil in Abu Dhabi. In 1951, Adu Dhabi clarified the concession to make clear that the rights to offshore exploration and extraction were not included. The Abu Dhabi Marine Areas, Limited (ADMA) was awarded the offshore concessions in 1954. Two-thirds of ADMA's equity was held by BP and one-third by CFP.

Serious oil exploration began in 1950. Large oil reserves were proven to exist by the PDTC in the Bab field by 1960. Soon after, yet more was discovered at Bu Hasa. Abu Dhabi exported its first barrel of oil in 1963.

Operations

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ADNOC is one of the world's largest energy companies measured by both reserves and production. The company operates two oil refineries, Ruwais and Umm Al Nar. ADNOC has 15 subsidiary companies in upstream, midstream, and downstream stages of production. ADNOC develops both onshore and offshore gas fields. ADNOC exports natural gas in the form of liquefied natural gas (LNG) in addition to producing supplies for local electricity and water utilities, to other domestic industries including petrochemicals plants, and for re-injection into reservoirs.[4]

Headquarters

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ADNOC Headquarters is a skyscraper office complex located in Abu Dhabi.[5] The building incorporates energy efficiency and sustainable engineering technologies, such as a double skin façade, photovoltaic glazing, LED exterior lighting. Designed by HOK, the overall building complex consists of more than 65 floors with an office tower, crisis management center, a heritage museum, and other support facilities.[6]

ADNOC Headquarter's was completed in 2015 after six years of construction and was officially inaugarated in 2016 by Sheikh Mohamed bin Zayed, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.[7][8]

Leadership and corporate governance

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Dr. Sultan Ahmed Al Jaber

Sultan Ahmed Al Jaber

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Main article: Sultan Ahmed Al Jaber

Sultan Ahmed Al Jaber is Minister of State in the United Arab Emirates, the Director-General and CEO of the Abu Dhabi National Oil Company, the chairman of Masdar, a company located in Abu Dhabi specializing in clean technology, renewable energy, and sustainable development and the chairman of Abu Dhabi Ports. He serves as the UAE's special envoy for energy and climate change.

In 2013, Dr. Al Jaber was named Minister of State and joined the UAE cabinet. Dr. Al Jaber's appointment was approved by Sheikh Khalifa bin Zayed Al Nahyan, the UAE's president. Speaking of the appointment of Dr. Al Jaber and other ministers, Sheikh Mohammed bin Rashid Al Maktoum, the UAE's vice president and prime minister and ruler of Dubai, said the new cabinet has "young faces with new ideas and energy to keep up with the rapid changes and to deal with our people's top priorities."[9]

Al Jaber holds an undergraduate degree in chemical engineering from the University of Southern California, a doctorate in business and economics from Coventry University, and an MBA from the California State University at Los Angeles.[10]

After his appointment, Al Jaber, revealed a plan to modernize ADNOC and make its operations more profitable. The plan includes streamlining ADNOC's operations to improve profitability and working to create a more commercially minded culture among the firm's employees; the goal is to put the quality of ADNOC's operations on equal footing with large multinationals while ensuring that the firm continues to help the UAE diversify its economy. As part of this effort, a master plan is being implemented to better coordinate upstream and downstream gas operations among ADNOC's many subsidiaries in order to more effectively meet the UAE's rising demand for natural gas. Maximizing profitability in upstream operations is another key priority. Under this plan ADNOC is also looking for ways to better coordinate downstream activity and create new products. Executive compensation has now been tied to key performance indicators and commercial benchmarks, especially operating cost per barrel. Al Jaber's plan will be implemented over several years. It is a part of the government's plan for economic diversification embodied in Economic Vision 2030.[11]

Since Al Jaber took the helm of ADNOC in 2016 he has implemented many major reforms, partly in response to a large decrease in oil prices over the previous two years. Senior management has been almost completely replaced with new talent, including the heads of important divisions and subsidiaries. Al Jaber has also consolidated ADNOC's subsidiaries, reducing their number from 18 to 15. Many other measures have been taken to reduce costs.[12]

2030 Strategy

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On 6 November 2016, the Supreme Petroleum Council approved ADNOC's 2030 Strategy. The 2030 Strategy is designed to generated sustained growth of ADNOC's upstream, midstream, and downstream lines of business. Al Jaber reacted by saying, "His Highness Sheikh Mohamed bin Zayed, and the SPC’s, approval of our 2030 strategy and five-year business plan are momentous milestones in our evolution into an agile, resilient and commercially focused organization, that is able to adapt and maintain its competitive edge in today’s changing energy landscape."[7][12]

The 2030 Strategy calls for upstream to remain ADNOC's most lucrative line of business. The strategy also calls for increasing the firm's production target to 3.5 million barrels per day in 2018, an expansion of 400,000 barrels per day. ADNOC is also committed to applying new technologies to increase oil recovery and making increased use of sour gas.[7][12]

ADNOC plans to rapidly expand production of sulphur over the course of a decade under the strategy with the hope of making Abu Dhabi one of the largest producers in the world. ADNOC intends to maximize the value it captures from its sulphur production by carefully developing new business in important phosphate markets and further developing the domestic sulphur products industry. This will include helping the existing ammonia and urea industry develop more advanced fertilizers.[7][12]

The strategy also calls for ensuring stable and affordable production of natural gas according to Gas Master Plan. This plan is part of ADNOC's goal of meeting Abu Dhabi's growing demand for natural gas at competitive prices.[7][12]

With respect to its downstream businesses, ADNOC will focus on more closely integrating its refining and petrochemicals enterprises to achieve efficiencies and increase profits. It plans to increase capacity for refining and producing petrochemicals via new investments in gasoline and aromatics as well as polyolefin. ADNOC wants to increase gasoline production to 10.3 million tons per annum by 2022 in order to maintain Abu Dhabi's self-sufficiency with respect to gasoline. Planned new gasoline and aromatics projects will add 4.2 million tons per annum of capacity in gasoline and 1.4 million tons per annum in aromatics over a five-year period starting in 2017. The target for petrochemical production is 11.4 million tons per annum by 2025, up from 4.5 in 2016.[7][12]

ADNOC will implement a uniform, group-wide procurement process. Having a single point-of-contact for the registration and pre qualification of vendors will reduce costs by eliminating repetitive tendering for the same goods and services while giving management greater freedom to manage spending.[7][12]

As part of the 2030 Strategy ADNOC has already implemented a system for grading its performance according to Key Performance Indicators. In order to promote fair, merit-based employee performance evaluations ADNOC will link such evaluations to objective business metric. ADNOC has improved its human resources and training practices to ensure that it remains and attractive employer. As of late 2016, the company plans to introduce a group-wide master plan for the management of human resources. Connecting hiring to business objectives will be a key part of this plan.[7][12]

Supreme Petroleum Council

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Main article: Supreme Petroleum Council

The Supreme Petroleum Council is the highest governing body of oil, gas, and similar industry related activities in the Abu Dhabi. The Council was formed in 1988. The Council is tasked with supervising all oil and gas companies that operate in Abu Dhabi and the United Arab Emirates and acts as the board of directors for ADNOC.[13]

Subsidiaries

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As a fully integrated oil and gas company, ADNOC operations fulfill every aspect of process in the petroleum industry. These process are then divided among multiple subsidiaries.[14][15]

Exploration and production of oil and gas

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Abu Dhabi Company for Onshore Petroleum Operations (ADCO)

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ADCO works onshore and in shallow coastal water. ADCO operates primarily in Abu Dhabi. The company was originally known as Petroleum Development (Trucial Coast). It received its first concession on 11 January 1939 but did not begin geological operations until after World War II. The first commercially viable oil discovery was made at Bab in 1960. In 1962, the company was renamed the Abu Dhabi Petroleum Company. Exports began to flow from the Jebel Dhanna terminal on 14 December 1963. Abu Dhabi's government acquired 25% equity in the company in 1973 and increased its stake to 60% in 1974. The company started using the name Abu Dhabi Company for Onshore Petroleum Operations in 1978. ADCO primarily exports from the Jebel Dhanna and Fujairah terminals.[16][17]

Abu Dhabi Marine Operating Company (ADMA-OPCO) and Zakum Development Company (ZADCO)

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ADMA-OPCO is the largest offshore oil producer in Abu Dhabi. It operates all offshore oil rigs in the emirate but three. As of 2010, it had a production capacity of 570,000 barrels per day. The majority of ADMA-OPCO's equity is held by ADNOC with minority shares held by BP, Total, and the Japan Offshore Drilling Company. ZADCO is another of ADNOC's offshore oil producers. It also offers exploration services. It produces from oil fields at Umm Al Dalkh, Satah, and Upper Zakum. ZADCO's oil from these fields is processed on Zirku Island. ADNOC is ZADCO's majority shareholder with minority stakes held by ExxonMobil and the Japan Offshore Drilling company.[17]

In October 2016, ADNOC announced that ZADCO and ADMA-OPCO would be combined into a single entity as part of a larger effort to increase efficiency and create an entrepreneurial corporate culture. The two companies will be dissolved and their assets will be combined into one "NewCo." ADMA-OPCO CEO Yasser Saeed Al Mazrouei will lead both companies during the consolidation..[18]

National Drilling Company (NDC)

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The NDC is ADNOC's oldest subsidiary. The NDC drills for oil both onshore and offshore in Abu Dhabi. ADNOC has 100% equity in the NDC.[17]

Oil and gas processing

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Abu Dhabi Gas Industries (GASCO)

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Main article: Abu Dhabi Gas Industries Limited

GASCO is a natural gas producer. ADNOC owns 68 percent equity in GASCO. Other shareholders are Shell Abu Dhabi with 15 percent equity, Total also with 15 percent with 15 percent, and Partex with 2 percent.[19] The company was established in 1975.[20][15]

Abu Dhabi Gas Liquefaction Company (ADGAS)

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ADGAS processes and distributes liquefied petroleum gas and liquified natural gas. GASCO supplies product to ADGAS at Das Island where it is processed and loaded on ships for export to East Asia, especially Japan. ADNOC is the majority shareholder. Minority shares are held by Mitsui, BP, and Total.[17]

Abu Dhabi Gas Development Company (Al Hosn Gas)

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The Abu Dhabi Gad Development Company, also known as Al Hosn Gas, is a joint $10 billion venture between ADNOC and Occidental Petroleum that is expected to extract at least one billion cubic feet of ultra-sour gas per day. On a daily basis the project is also expected to produce 504 million cubic feet of natural gas, 33,000 barrels of condensates, and thousands of tons of natural gas liquids, and thousands of tons of sulphur granules. The Project is located in the Shah gas field about 210 kilometers west of Abu Dhabi. Half of this field's production will be used to service domestic demand in the UAE and minimize the need for gas imports. Al Hosn Gas is 60% owned by ADNOC with the remaining equity held by Occidental.[21][15]

Abu Dhabi Oil Refining Company (TAKREER)

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TAKREER, was created in 1999 to takeover oil refining from ADNOC. TAKREER refines crude oil and condensate, various petroleum products, and granulated sulphur.[22] In 2015, TAKREER completed a major expansion of its Ruwais refinery. The $10 billion project doubled the capacity of the facility. A large part of the increased output is dedicated to diesel production due to demand from Asia. Ruwais has the ability to refine 600,000 tonnes of high-quality base oils per year. These oils are used primarily for automative lubricants.[23]

Chemicals and petrochemicals

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Ruwais Fertilizer Industry (FERTIL)

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FERTIL was established in 1980. It manufactures urea and ammonia at its plant in Ruwais.[24][15] Most FERTIL's products are exported to India. FERTIL is a joint venture with Total. ADNOC retains majority control.[17]

Abu Dhabi Polymers Company (Borouge)

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Main article: Borouge

Borouge is a manufacturer of polyolefins. It is a joint venture of ADNOC and Borealis of Austria. It was founded in 1998, and has two divisions, one based in Abu Dhabi and another based in Singapore. The company supplies polyolefin plastics (polyethylene and polypropylene). They focus on differentiated high-end applications in the Middle East and Asia Pacific with Borstar Enhanced Polyethylene produced in Abu Dhabi and the Borealis range of speciality products.[25][15]

Borouge's main plant is in Ruwais, next to ADNOC's main oil refinery. An expansion in late 2010s cost $4 billion and boosted total capacity to 4.5 million tonnes per year. The plant is now the largest integrated polyoefins works in the world. It can produce 2.3 million tones of regular polyethylene, 1.7 million tons of polypropylene, and 350,000 tonnes of low-density polyethylene per year. In 2016, a cross-linked polyethylene compounding facility with a capacity of 80,000 tonnes per year was opened.[26]

ADNOC Linde Industrial Gases Company (ELIXIER)

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ELIXIER was founded in 2007. It manufactures industrial gas used in the oil, gas, and petrochemical industries. ELIXIER works very closely with GASCO. The firm is a joint-venture between ADNOC and the Linde Group of Germany. ADNOC holds 51% equity with the remainder held by Linde.[17]

Shipping and port services

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As of October 2016, ADNOC planned to merge ESNAAD, IRSHAD, and ADNATCO into a single company yet-to-be-named. The merger is scheduled to be completed by the end of 2017. The new company will have a workforce of about 4,000 people. NGSCO will continue to operate independently but the new firm will hold ADNOC's 70% equity stake in that enterprise.[27]

Petroleum Services Company (ESNAAD)

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ESNAAD is a wholly owned subsidiary of ADNOC. ESNAAD is headquartered in Mussafah where it operates from the Mussafah Offshore Supply Base. The base covers over 1.4 million square meters of land and offers extensive facilities to support both the on-shore and off-shore oil and gas industry. The company offers oilfield services, marine services, and base services.[28]

Abu Dhabi Petroleum Ports Operating Company (IRSHAD)

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IRSHAD runs Abu Dhabi's petroleum exporting port facilities. It is responsible for berthing and loading tankers. IRSHAD's most important facility is the port at Jebel Dhanna.[17]

Abu Dhabi National Tanker Company and the National Gas Shipping Company (ADNATCO-NGSCO)

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ADNATCO-NGSCO transports crude oil and liquified natural gas from Abu Dhabi to ports around the world on its fleet of oil tankers and LNG carriers. The two companies effectively operate as a single entity.[17]

Refined products distribution

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ADNOC Distribution

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ADNOC Distribution operates hundreds of service stations across the UAE, provides bunkering services at Mina Zayed port, aviation fuel services at most of the country's airports, and sells its own brand of lubricants throughout the Gulf region.[17]

See also

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References

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  1. ^ Oil & Gas Journal, Worldwide Look at Reserves and Production, January 1, 2015
  2. ^ FORBES The World's 25 Biggest Oil Companies
  3. ^ [1]
  4. ^ usaspending.gov (2008). "Federal Contracts to ABU DHABI".
  5. ^ "ADNOC Headquarters". The Skyscraper Center. Council on Tall Buildings and Urban Habitat. Retrieved 2013-03-31.
  6. ^ "Double Facade Study - Thesis" (PDF). Retrieved 2015-11-03.
  7. ^ a b c d e f g h [2]
  8. ^ [3]]
  9. ^ [4]
  10. ^ "Members Of The Cabinet". www.uaecabinet.ae. Retrieved 2016-01-19.
  11. ^ [5]
  12. ^ a b c d e f g h [6]
  13. ^ "Abu Dhabi National Oil Company (ADNOC) - The Supreme Petroleum Council (SPC)". Retrieved 28 June 2010.
  14. ^ ""ADNOC and its Group of Companies"" (PDF)., ADNOC website.
  15. ^ a b c d e [7]
  16. ^ [8]
  17. ^ a b c d e f g h i [9]
  18. ^ [10]
  19. ^ The Report: Abu Dhabi 2007. Oxford Business Group. 2007. p. 151. ISBN 9781902339719.
  20. ^ The Oil & Gas Year Abu Dhabi 2010. Wildcat Publishing. 2011. p. 62. ISBN 9781906975180.
  21. ^ [11]
  22. ^ [12]
  23. ^ [13]
  24. ^ [14]
  25. ^ Borouge website: Locations, visited 5 August 2016
  26. ^ [15]
  27. ^ [16]
  28. ^ [17]
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Category:Oil and gas companies of the United Arab Emirates UAE Category:Government-owned companies of the United Arab Emirates Category:Companies based in Abu Dhabi Category:Energy companies established in 1971 Category:Non-renewable resource companies established in 1971 Category:1971 establishments in Abu Dhabi

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