ADNOC Logistics & Services’ (ADNOC L&S) unveiled strategic growth plans during a visit from UAE dignitaries to Khalifa Port, Abu Dhabi, where some of the company’s multi-purpose fleet was on display. The strategy is set to transform ADNOC L&S into a global shipping champion.
The ambitious growth plan is aligned with ADNOC Group ambition to create a more competitive and diverse offering to leverage market expansion while strengthening its role by transforming into a fully integrated marketer and trader of its products. This is enabled by its shipping arm ADNOC L&S.
ADNOC L&S plans to acquire its first crude oil tankers, while expanding its gas and dry bulk fleet, by adding more than 25 vessels within the next five years.
This will enable ADNOC to sell more of its commodities on a ‘delivered basis’, increasing its global reach, unlocking new market opportunities and stretching the value of its supply chain.
H.E. Dr Al Jaber, ADNOC Group CEO said: “We have set out a clear growth strategy for ADNOC L&S and defined our intent to meet the Group’s present and future shipping and marine services requirements. At the same time, there will be a focus on ADNOC’s trading ambitions, which foresee a significant growth in the delivery of products to our global customers.
“ADNOC Logistics & Services is a crucial link in the ADNOC supply chain, delivering oil, gas and petroleum products to our customers across the world. As we grow our trading business and strengthen our integrated maritime capabilities, we will capitalize on market growth opportunities and position the company as the largest regional integrated maritime services company.”
Capt. Abdulkareem Al Masabi, ADNOC L&S CEO, said: “We have set out an ambitious five-year strategy for growth which defines our intent to meet the ADNOC and the UAE’s present and future requirements, while pursuing opportunities in fast growing global markets.”
“The ability to serve greater volumes is of significant importance. The delivery of ADNOC Group’s 2030 smart growth strategy will result in a substantial increase in the company’s production of crude oil, refined products and petrochemicals. Combined with ADNOC’s move into trading, which means it will take greater control over the delivery of its products to customers and end users, ADNOC L&S is expected to grow and diversify in order to meet the ever complex and evolving needs of the industry.”
ADNOC L&S was formed in late 2016 from three ADNOC subsidiaries, ADNATCO, IRSHAD and ESNAAD. The integration created synergies between shipping, marine services, offshore logistics and onshore services, thereby enhancing organizational capabilities. Following the integration, ADNOC L&S has successfully increased revenue by 34 per cent. Overall, the company’s net operating profit has risen 220 per cent since the integration.
ADNOC L&S’s overall business model creates value through four major activities: firstly, shipping activities, either with its own vessels or via chartering, which includes crude and refined products, dry bulk, and LNG transport. Secondly, marine services activities, which comprise petroleum ports operations, diving and oil spill response. Thirdly, offshore logistics activities that include offshore support vessels and an integrated logistics base. Fourthly, onshore activities which consist of a marine passenger terminal and a container terminal.
ADNOC L&S will play a critical role in supporting the delivery of ADNOC’s 2030 smart growth strategy, through which ADNOC will increase its oil production capacity to 4 million barrels per day (mmbpd) by the end of 2020 and 5mmbpd by 2030. In the Downstream, ADNOC intends to triple production of petrochemicals to 14.4 million tons per annum and double its crude refining capacity by 2025. This ambitious growth plan, combined with ADNOC’s move into trading, presents significant opportunities for ADNOC L&S.
ADNOC L&S recently signed a Memorandum of Understanding with China’s Wanhua Petrochemical to explore the creation of a joint venture to pave the way for the transport of greater gas volumes in line with market demand. Wanhua Petrochemical is an existing customer of ADNOC, having signed 10-year LPG purchase contract for 1MMPTA.
Source: ADNOC Logistics & Services
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