Historic milestone for Adnoc as it begins new derivatives trading

The Abu Dhabi National Oil Company (Adnoc) announced on Wednesday that one of its new trading entities, Adnoc Trading, has started derivatives trading as a direct market participant. This represents a major milestone for the company, as it moves from being a traditional marketer of its products to a more sophisticated global trader.

Adnoc has incorporated two trading units, Adnoc Trading (AT), which focuses on the trading of crude oil, and Adnoc Global Trading (AGT) a joint venture with ENI and OMV that will focus on the trading of refined products. The new offices of both AT and AGT are located in Abu Dhabi’s International Financial Centre at Abu Dhabi Global Market (ADGM).

Adnoc Trading is now operational and Adnoc Global Trading is on track in establishing the required processes, procedures and systems to begin operations in the coming months. The Adnoc Global Trading team are already optimising Adnoc’s flows (crude, feedstock and product optimisation), and, as its new trading systems are finalised will ramp up its activities.

By entering trading, Adnoc is able to offer a broader range of services to its customers and capture more value through new revenue streams from the sale of its growing crude and refined products portfolio. This significant step is a critical enabler of Adnoc’s 2030 strategy and its drive to become a more commercially-driven and performance-led organisation.

The opening of its trading offices further demonstrates Adnoc’s resilience in overcoming the unprecedented challenges of the COVID-19 pandemic.

Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc Group CEO, said: “This historic achievement is yet another important milestone for Adnoc as we become a more modern, agile and progressive energy company. Our steadfast focus is on providing a better service to our customers, while also stretching the margin from every barrel of oil that we produce, refine and trade. Our move into trading supports both of these goals.

“The opening of our trading offices at Abu Dhabi Global Market (ADGM) further reinforces its position and reputation as a leading and growing commodities trading hub for our nation and the Middle East region.”

Ahmed Ali Al Sayegh, UAE Minister of State and Chairman of Abu Dhabi Global Market, said: “We congratulate Adnoc on the auspicious launch of their trading operations, and setting another major milestone as they continue to unlock new potential and opportunities to further the UAE economy. We are pleased that Adnoc Global Trading and Adnoc Trading have chosen ADGM as their home base and warmly welcome the teams to the ADGM family.”

“As an International Financial Centre, ADGM is committed to supporting Adnoc and Abu Dhabi institutions in their strategic development and future endeavors via our financial and business platforms. We will work closely together as one entity to propel the economic growth of Abu Dhabi and the UAE well into the future.”

Adnoc Distribution: Adnoc Distribution announced on Wednesday the approval of an interim dividend payment to its shareholders for the first six months of 2020 of Dhs1.285 billion (10.285 fils per share), equivalent to $350 million.

This is the first payment in what is expected to be a full-year 2020 dividend payment of Dhs2.57 billion (Dhs20.57 fils per share), reflecting a 7 per cent increase compared to last year’s dividend of Dhs2.39 billion (19.10 fils per share).

During its General Assembly meeting in March 2020, the company announced an amendment to its dividend policy for 2021 onwards, setting an Dhs2.57 billion dividend for 2021 and a dividend equal to at least 75 per cent of distributable profits from 2022 onwards, subject to the discretion of the Board of Directors and the approval of shareholders.

Adnoc Distribution expects to continue to pay half of the annual dividend in October of the relevant year and half in April of the following year. The new dividend policy demonstrates the company’s strong record of progressively increasing its dividends to its shareholders. As per the approved policy, the second and final dividend for 2020 is expected to be paid in April 2021, subject to the Board of Directors’ recommendation and shareholders’ approval.

Despite the challenging operating environment, the company has accelerated delivering on its strategic smart growth plans by opening 37 new stations in the UAE, as at end of September 2020, a seven times increase in new station openings when compared to last year, and remains on-track to deliver 50-60 new stations by full year 2020, including 20-25 new stations in Dubai.

WAM/Agencies