Adnoc to acquire 30% equity stake in Absheron gas, condensate field

Abu Dhabi National Oil Company (Adnoc), the State Oil Company of Azerbaijan (SOCAR) and TotalEnergies on Friday announced a strategic transaction that will see Adnoc acquire a 30 per cent equity stake in the Absheron gas and condensate field in the Caspian Sea.

Adnoc’s investment into the Caspian region aims to create a substantial growth position as it enters the international gas market and reinforces the energy partnership between the UAE and Azerbaijan. Financial details of the transaction are not being disclosed.

Upon completion of the transaction, which is subject to customary regulatory approvals, Adnoc will own a 30 per cent participating interest in Absheron, with SOCAR and TotalEnergies holding 35 per cent stakes, respectively.

Entering into a strategic partnership with SOCAR also elevates Adnoc’s long-standing partnership with TotalEnergies, who until now had held a 50 per cent share alongside SOCAR in Absheron.

The partnership will enable Adnoc to build a major footprint in a region with prolific natural resources and significant growth potential, facilitating a route into attractive international growth markets for gas in Europe and Central Asia.

The landmark transaction further solidifies the strategic bilateral energy partnership between the UAE and Azerbaijan. As the world transitions to a low-carbon energy system, natural gas will play a crucial role as a key transition fuel, with this investment further cementing Adnoc’s leading position as a reliable supplier of lower-carbon energy.

The transaction also complements Adnoc’s investment through Masdar to develop 10 GW of renewable energy capacity from solar, onshore and offshore wind, and green hydrogen in collaboration with SOCAR, supporting both nations’ shared energy transition agenda.

Commenting on the transaction, Musabbeh Al Kaabi, Executive Director of Low Carbon Solutions and International Growth at Adnoc, said, “With global gas demand expected to steadily increase over the coming decades, Adnoc will continue to responsibly meet the world’s energy needs by developing and producing natural gas from world-class assets such as Absheron.

“We believe this strategic partnership with SOCAR and TotalEnergies, unlocks the potential of the Caspian region for decades to come and complements a broader energy collaboration between the UAE and Azerbaijan that will accelerate the growth of the global renewable energy sector as both countries take bold steps to transition towards a lower-carbon future.”

SOCAR President Rovshan Najaf said, “Azerbaijan’s favourable investment climate offers conducive conditions for foreign investors in the energy sector. This deal underscores our commitment to strengthening the relations with our partners and reaffirms Azerbaijan’s position as a reliable partner in the energy sector. We are excited to embark on this journey with Adnoc and TotalEnergies, building upon our shared vision and complementary strengths.”

“TotalEnergies is pleased to welcome Adnoc, one of its strategic partners, into the Absheron gas field, where production of the first phase started in early July and which offers a significant further development potential to meet the growing gas demand,” said Nicolas Terraz, President, Exploration & Production at TotalEnergies.

Adnoc drilling profit: Adnoc Drilling Company today announced financial results for the first half and second quarter of 2023. The Company’s strategy of expanding both fleet and service offering has driven net profit to $446 million, a significant increase of 18 per cent year-on-year during the first half of 2023.

Adnoc Drilling’s first half revenue increased to $1.4 billion, up 13 per cent year-on-year. Revenue growth was driven by the Oilfield Services (OFS) and Offshore Jack-Up segments which increased by 45 per cent and 31 per cent respectively.

Abdulrahman Abdulla Al Seiari, Chief Executive Officer, Adnoc Drilling, said, “Adnoc Drilling’s excellent financial performance in the first half of 2023 is testament to our strategy of expanding both our drilling fleet and service offering while also improving our margins through strong cost performance. Moreover, we progressed on our goal to expand the fleet, signing agreements to build 16 hybrid powered land rigs, which also form a significant additional element of our decarbonization strategy.”

“This strong and growing financial performance underpins our progressive dividend policy and we expect the 2023 interim dividend to be in line with it, further demonstrating our continuous commitment to sustained value creation for our shareholders.”

First half Ebitda increased significantly by 17 per cent year-on-year to $677 million, due to the uptick in revenue coupled with the delivery of substantial cost savings, leading to an exceptional Ebitda margin of 47 per cent.

Second quarter revenue grew by 8 per cent year-on-year to $724 million and by 1 per cent sequentially. Ebitda in the quarter increased by 15 per cent year-on-year to $344 million, leading to a 48 per cent Ebitda margin, or 3 percentage points higher year-on-year. Ebitda also increased by 3 per cent sequentially.