By Tim Frazer

Moves by the Abu Dhabi National Oil Company (ADNOC) indicate it is seeking to complete its transformation from a state-owned giant into a major energy company capable of competing globally.

Financial Times.

When the United Arab Emirates withdrew from OPEC, the head of the Abu Dhabi National Oil Company (ADNOC) stated that the step was not intended to diminish rivals, but rather reflected the UAE’s confidence in its capabilities and ambitions.

Three months later, ADNOC’s actions point to efforts to maximise oil production, establish new marketing channels after the catastrophic closure of the Strait of Hormuz, and complete its shift from a state-owned behemoth into a major global energy force able to compete worldwide.

As the company that contributed more than any other to financing the UAE’s transformation into a modern international commercial hub, ADNOC’s future carries major political importance and is closely tied to the country’s long-term success.

Robin Mills, chief executive of Qamar Energy, a Dubai-based energy consultancy, said: “This is a critically important period for ADNOC. It is an extension of the path it has followed over the past five or six years, but the plan has accelerated and become bolder.”

The UAE’s growing influence over the past decade, particularly in international and military affairs, has earned it the nickname “Little Sparta” in diplomatic circles.

ADNOC insists its strategy has not changed following the UAE’s withdrawal from OPEC. A company spokesman said: “We have accelerated our development plans in the UAE and internationally to meet rising demand.” Sultan Al Jaber, ADNOC’s chief executive, has insisted that global oil demand is likely to remain strong for longer than many believe.

The company’s push to accelerate production stems from long-term planning; some believe it fears the end of the oil era and wants to monetise its natural resources while they still hold value.

ADNOC has already invested tens of billions of dollars in international expansion, consolidating its position as a global petrochemicals giant — one of the sectors expected to see continued rising demand for oil even if the spread of electric vehicles and renewable energy slows growth elsewhere. This year ADNOC completed the merger of its petrochemicals business with its Austrian feedstock arm OMV, creating Borouge Group International AG, valued at $60 billion.

It also completed its acquisition of the German polymer manufacturer Covestro at the end of last year for $17 billion. In recent weeks ADNOC has taken a number of further steps.

Its distribution arm acquired Shell’s South African fuel stations for $1 billion, giving the UAE a retail presence in Africa’s largest economy and serving as a statement of intent to strengthen its international position.

ADNOC also abandoned its attempt to establish a new pricing benchmark for Murban crude, its flagship grade, and returned to a previous system linking oil prices to a basket of Middle Eastern crudes.

Mills of Qamar Energy said: “If they want to build an oil company capable of competing internationally, they need an appropriate set of international assets. They are pumping in huge amounts of money, and this is a potential driver for the rest of the economy because they have previously shown they can get things done.” Among ADNOC’s urgent priorities is the creation of safer distribution channels.

ADNOC currently has a single crude oil pipeline with a capacity of 1.5 million barrels per day running overland to Fujairah, on the eastern side of the Strait of Hormuz. The company is now intensifying plans to increase capacity to ensure Iran does not hold the same leverage over its export ability.

ADNOC is building a second pipeline to Fujairah, which will double the volume of oil that can be exported from the UAE’s eastern coast starting in 2027. It is also looking to build a refined products pipeline, and these plans are likely to expand further if the struggle for control of the Strait of Hormuz continues.