Exclusive-Abu Dhabi’s ADNOC considers next year’s logistics and service sector IPO-source Reuters

© Reuters. File photo: Overview of ADNOC headquarters in Abu Dhabi, United Arab Emirates, May 29, 2019. REUTERS/Christopher Pike/File Photo

Hadeel Al Sayegh

DUBAI (Reuters)-Two sources familiar with the matter told Reuters that the state-owned oil company Abu Dhabi National Oil Company (ADNOC) is weighing the initial public offering (IPO) of its maritime services, logistics and shipping divisions next year.

The source said that ADNOC Logistics & Services (ADNOC L&S) has been selected to list in Abu Dhabi in 2022, but declined to be named because the matter was not disclosed.

They said that after testing investor interest and market conditions, an agreement may be reached.

When Reuters contacted ADNOC on Sunday, ADNOC declined to comment.

Gulf oil producers are considering selling shares in energy assets to use the rebound in crude oil prices to attract foreign investors.

ADNOC supplies nearly 3% of the world’s oil demand, and it is seeking to extract value from the businesses it owns and divest assets that are considered non-core businesses.

It also took advantage of the rebound in the Abu Dhabi stock index, which has risen about 65% this year and is the best-performing market in the Gulf region.

ADNOC offered an 11% stake in its drilling business in September, which raised more than $1.1 billion from investors. ADNOC and chemical company OCI raised $795 million in October through the public sale of its fertilizer company Fertiglobe.

ADNOC L&S provides refined products, dry bulk and liquefied products from Abu Dhabi to its international customers.

It was formed in 2016 by the merger of Abu Dhabi National Tanker Company, Petroleum Service Company and Abu Dhabi Petroleum Port Operating Company.

The department has a fleet of more than 240 owned and chartered vessels, including oil tankers and ultra-large crude oil carriers. It is also the only licensed operator of all oil ports in Abu Dhabi.

This business is an important division of ADNOC, and the company is seeking to increase its crude oil production capacity to 5 million barrels per day by 2030.

The division also operates feeder ships that transport goods on behalf of ADNOC and other customers. As the coronavirus pandemic has created bottlenecks and disrupted the supply chain, freight rates for goods have soared in the past year.

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