Tuesday, Oct 18, 2016

Abu Dhabi: Abu Dhabi National Oil Company (Adnoc) announced plans to integrate the operations of three of its shipping, marine and services companies into a single entity as the company moves ahead to consolidate its operations due to low oil prices.

Adnoc in a statement said the Abu Dhabi National Tanker Company (Adnatco), Petroleum Services Company (Esnaad), and Abu Dhabi Petroleum Ports Operating Company (Irshad) will be integrated to drive efficiency, optimize resources and assets across their various operations to maximize value.

The integration is expected to be completed by the end of the next year under a steering committee formed by Adnoc.

The new entity will operate over 165 vessels, including LNG vessels, bulk carriers, chemical and products tankers, container and container-feeder vessels, as well as modern multi-purpose vessels and support vessels.

Dr. Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc Group CEO, said: “This consolidation is aligned with our long-term vision and the core pillars of our business strategy, focused on efficiency, performance, profitability and people.”

“By leveraging the experience and assets across the three companies, we aim to deliver an improved and cost-effective service to meet the needs of the Adnoc Group.”

“The consolidation will capture synergies, generate savings and ensure value creation.”

The National Gas and Shipping Company (Ngsco), in which Adnoc owns a 70% stake, will remain a separate firm. Adnoc, however plans to transfer its Ngsco shareholding to the new company, and integrate its operations to maximise potential synergies.

Adrian Nizzola, a partner in Dubai based consultancy Simmons & Simmons told Gulf News that there is a global trend for IOCs (International Oil Companies) as well as NOCs (National Oil Companies) like Adnoc to focus on reducing costs and capturing efficiencies due to low oil prices.

“No one can be sure what the revenue side will look like, as the future of oil prices are even more difficult now than ever to try and predict.”

This is the second such consolidation effort undertaken by Adnoc in less than a month’s time. On October 4, Adnoc announced plans to combine Abu Dhabi Marine Operating Company (Adma-Opco) and Zakum Development Company (Zadco) into a new entity.

The three companies which will be merged into single entity form an important part of Adnoc operations specially in transportation of oil, managing petroleum ports and supporting the oil and gas industry with equipment and vessels, according to the company’s websites.

Adnatco is involved in the global transportation of petroleum products and bulk cargo of sulphur as well as polyethylene produced by Adnoc’s petrochemicals subsidiary Borouge from its plant in Ruwais. The company’s Chief Executive Officer is Sultan Al Zaabi.

Petroleum Services Company (Esnaad)operates from Musaffah offshore base and supports the offshore and onshore oil and gas industry with equipment, manpower and port services. The company has over 1300 employees.

Abu Dhabi Petroleum Ports Operating Company (Irshad) manages petroleum ports of Abu Dhabi and also operates fast ferry boats to transport workers to oil fields from Abu Dhabi. It operates 52 vessels of various types and the CEO is Khalifa Mohammad Al Qubaisi.

The total oil production of Adnoc group is about 3.1 million barrels per day.

By Fareed Rahman Senior Reporter

Gulf News 2016. All rights reserved.