I am not a soothsayer so I could not foretell the Abu Dhabi National Oil Company’s decision to mull a stock listing of its services units. Or, honestly speaking, maybe I did foresee this, especially after ADNOC’s peer Saudi Aramco set a revolutionary precedent last year – only did not expect ADNOC to follow suit this soon.
For those of you who have been living in a cave, the Emirati oil giant last month announced it would consider an initial public offering (IPO) of minority stakes in some of its businesses ‘which have attractive investment and growth profiles’, with reports now suggesting that it is considering floating its distribution business, among others.
It is quite apparent that ADNOC’s decision has been inspired by Saudi oil behemoth Aramco’s similar move in January last year – especially in the light of the close bond that prevails between the kingdom and the UAE on the diplomatic, geopolitical and socio-economic fronts.
Yet, it is interesting to note that the way ADNOC wishes to go about this landmark share sale has its own nuances. While Aramco desires to list its asset in a local stock market, as well as on a major global capital market/s, ADNOC will reportedly float its unit/s only on the Abu Dhabi bourse. Also, unlike Aramco which is mulling the part-privatisation of its downstream business, word is that ADNOC is reviewing its retail unit, and will not touch its downstream assets.
Most strikingly, despite announcing this plan over one and a half years after Aramco’s monumental decision, it has now been reported that ADNOC’s IPO could come ahead of Aramco’s – as early as Q4 2017! Details of the timing of the Aramco IPO are sketchy, although most are hoping for it to happen at some point in 2018.
I couldn’t resist the temptation of conducting an online opinion poll on the development that has caused a stir in the global energy market – to understand what the industry’s pundits think about it (see the result below). Most voters seem to think that ADNOC’s choice to welcome on board private partners by way of this stock listing, is indicative of the modern wave of transparency, engagement and operational efficiency that is sweeping across the Gulf’s economic landscape.
Before I forget, I wish to thank the numerous companies and individuals who have enthusiastically nominated themselves for the Oil & Gas and Refining & Petrochemicals Middle East Awards 2017. Leave your entries with the jury now!
How did you perceive ADNOC’s massive announcement of it considering the IPO of some of its assets?
30.77%
It was only a matter of time after its Gulf peer Aramco embarked upon a similar strategy last year.
3.85%
I did not see that coming. It was totally out of the blue!
3.85%
The move was along expected lines, although I felt ADNOC will take a while to decide on such a plan.
19.23%
ADNOC has only said it is “considering” an IPO. I’d rather wait for key details to emerge.
42.31%
The move is reflective of the willingness among Gulf states to undergo an economic transformation.
Source: arabianoilandgas.com
