MOSCOW (MRC) – The Abu Dhabi National Oil Company (ADNOC) signed a comprehensive strategic framework agreement with the Federal State Budgetary Organization “Russian Energy Agency” by the Ministry of Energy of the Russian Federation (REA), to explore new opportunities for collaboration across the oil and gas value chain, said Ogj.
The agreement highlights the strength of the UAE-Russia bilateral relations and underpins ADNOC’s expanded approach to partnerships that is enabling it to unlock and maximize value across its entire portfolio. The framework agreement was signed by Abdulmunim Saif Al Kindy, ADNOC Upstream Executive Director and Oleg Valerievich Zhdaneev, Head of Technology Development Division at REA.
Under the terms of the agreement, ADNOC and REA will jointly explore opportunities for collaboration in relation to Abu Dhabi’s exploration and production concessions. This potential for collaboration in relation to Abu Dhabi’s exploration and production concessions builds on the momentum of the successful conclusion of Abu Dhabi’s debut competitive exploration and production bid round. It also recognizes Abu Dhabi’s abundant untapped oil and gas resources and the UAE’s stable and trusted business environment.
In addition, the two partners will jointly assess strategic opportunities for collaboration in the downstream sector, including refining and petrochemicals opportunities in Abu Dhabi and internationally. This cooperation complements ADNOC’s strategy to create a more valuable downstream business as drives its downstream expansion plans and stretches the dollar from every barrel of oil it produces.
At the heart of ADNOC’s downstream expansion strategy is a USD45 billion investment plan aimed at creating the world’s largest integrated refining and petrochemicals complex in Ruwais, located in the Emirate of Abu Dhabi, which will see the company triple production of petrochemicals to 14.4 million tons per annum by 2025.
ADNOC and REA have also agreed to explore potential opportunities for collaboration in marketing sales and trading projects in Abu Dhabi and internationally. ADNOC is developing its global marketing, supply, and trading platforms to better optimize and commercialize its assets and product flows to deliver greater value from its operations.
In August, the company acquired a 10 percent equity stake in VTTI BV, the global storage terminal owner and operator, providing it with better access to customers around the world and enabling it to respond more quickly to market dynamics while capturing trading value throughout its entire supply chain.
ADNOC and REA will also evaluate collaboration opportunities in the liquefied natural gas (LNG) sector that could unlock value and drive revenue growth as ADNOC delivers on its integrated gas strategy approved by Abu Dhabi’s Supreme Petroleum Council (SPC) last year. ADNOC’s integrated gas strategy is enabling it to seize incremental LNG and gas-to-chemicals growth opportunities, where they arise, from the UAE’s dynamic demand/supply position and evolving energy mix.
The framework agreement will see ADNOC and REA explore potential opportunities for collaboration in relation to technical and operational support exchanges in artificial intelligence and other advanced technologies that can help optimize performance and drive efficiencies.
The REA was established in 2009 and provides scientific, analytic, and technological support in the field of fuel and energy complex, as well as conducts research on scientific and technological problems in the energy industry for the Russian Federation.
The Russian Federation has the largest natural gas reserves and the seventh largest oil reserves of any country in the world. Last year, bilateral relations between the UAE and Russia were strengthened when H.H. Sheikh Mohamed bin Zayed Al Nahyan and President Vladimir Putin signed a Declaration of Strategic Partnership to cooperate in various sectors such as politics, security, economy, and culture. In 2018, bilateral trade between the UAE and Russia topped AED 11 billion (USD3 billion), a 21 percent increase on the previous year.
As MRC reported earlier, in March 2019, Borealis and ADNOC signed Memorandum of Understanding to explore strategic opportunities in the polyolefin industry. Under the terms of the agreement, Borealis and ADNOC will jointly explore potential growth opportunities within the integrated polyolefin industry in key geographical markets.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
ADNOC is one of the world’s leading diversified energy and petrochemicals groups, with a daily output of about three million barrels of oil and 10.5 billion cubic feet of natural gas. With 14 specialist subsidiary and joint venture companies, ADNOC is a primary catalyst for the UAE’s growth and diversification.