Eni and ADNOC signed a Share Purchase Agreement to enable Eni to acquire from ADNOC a 20% equity interest in ADNOC Refining. The signing of the agreement was witnessed by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Giuseppe Conte, the Italian Prime Minister. The agreements were signed by His Excellency Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Claudio Descalzi, Eni CEO. ADNOC also announced that it sold to OMV a 15% equity interest in ADNOC Refining, with ADNOC retaining the remaining 65%. ADNOC, Eni and OMV also agreed to establish a Trading Joint Venture with the same shareholding of ADNOC Refining.

The agreed terms for the 20% equity interest acquired by Eni include a cash price of approximately $3.3 billion after deduction of the net debt and subject to closing adjustments, which corresponds to an enterprise value of approximately $3.9 billion (Eni share). The acquisition will be completed subject to satisfaction of a number of conditions precedent, including clearance from UAE and other regulatory authorities.

This is one of the largest ever refinery transactions and reflects the scale, quality, and growth potential of ADNOC Refining’s assets, coupled with an advantageous location from which to supply markets in Africa, Asia and Europe. ADNOC Refining operates three refineries in Ruwais (Ruwais East and Ruwais West) as well as Abu Dhabi (Abu Dhabi Refinery), with a total refining capacity in excess of 900 thousand barrel per day.

The Ruwais complex ranks fourth worldwide in terms of capacity and provides for a high conversion factor using “state-of-the art” technologies and a deep conversion process scheme. The complex has already demonstrated a resilient refining margin thanks to its competitive advantage in terms of integration, economy of scale, complexity and efficiency of the plants, proximity to the upstream fields which supply the crude and gas feedstock, and barycentric position to Eastern and Western markets. Furthermore, a development plan is already defined to further improve the complex’s competitiveness and profitability by increasing the flexibility of crude supply and energy efficiency.

Eni will contribute to the technological development of the complex having already matured, in its European refineries, a vast experience in similar processes (such as fluidized catalytic cracking, hydrocracking, residue conversion and desulphurization, coking and others) and in the optimization activities to maximise the margin of refined barrels. This acquisition will allow Eni to further strengthen the resilience of its refining business by reducing the overall Eni’s refining break even target margin by 50% down to around 1,5 $/bl.

Further value will be created as Eni and OMV join ADNOC in setting up a new trading joint venture, with the same equity shareholdings as the ADNOC Refining partnership. Once established, the trading joint venture will be an international exporter of ADNOC Refining’s products, with export volumes equivalent to approximately 70% of throughput. Domestic supply within the UAE will continue to be managed by ADNOC.

His Excellency Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “We are delighted to partner with Eni and OMV in our refining business and the new trading company. Such partnerships follow our leadership’s wise guidance to unlock and drive greater value across our business. These innovative partnerships will support our ambition of becoming an international downstream leader with the flexibility to respond quickly to shifting market needs and dynamics. They will help enable our objective of unlocking even more value from every barrel of oil we produce. Working closely with our partners, we will also deliver further efficiencies across our operations and improve asset and business performance”

Eni’s CEO, Claudio Descalzi, said: “These agreements consolidate our strong partnership with ADNOC. In the space of less than one year, we have been able to create a business hub with world class upstream operations and a material and efficient refinery capacity with further potential growth. This transaction, which allows us to enter the United Arab Emirates’ downstream sector and represents a 35% increase in Eni’s global refining capacity, is in line with our announced strategy to make Eni’’s overall portfolio more geographically diversified, more balanced along the value chain, more efficient and more resilient to cope with market volatility.”

Eni has been present in the UAE upstream sector since march 2018 when it was awarded a 10 percent interest in ADNOC’s Umm Shaif and Nasr concession and a 5 percent interest in the Lower Zakum concession, followed in November 2018 by the award of a 25 percent interest in the Ghasha Concession, ADNOC’s mega offshore gas project. On 12 January this year Eni was awarded a 70 percent interest in offshore exploration blocks 1 and 2.

In addition to the United Arab Emirates, in the Middle East Eni is also present in Oman, Bahrain, Lebanon and Iraq.

About ENI

Eni is an integrated energy company employing more than 34.000 people in 69 countries in the world. Eni engages in oil and natural gas exploration, field development and production, as well as in the supply, trading and shipping of natural gas, LNG, electricity and fuels. Through refineries and chemical plants, Eni processes crude oil and other oil-based feedstock to produce fuels, lubricants and chemical products that are supplied to wholesalers or through retail networks or distributors.

About ADNOC

ADNOC is a major diversified group of energy and petrochemical companies that produces about 3 million barrels of oil and 10.5 billion cubic feet of raw gas a day. Its integrated upstream, midstream and downstream activities are carried out by 14 specialist subsidiary and joint venture companies.

About OMV Aktiengesellschaft

OMV produces and markets oil and gas, innovative energy and high-end petrochemical solutions – in a responsible way. With Group sales of EUR 20 bn and a workforce of around 20,700 employees in 2017, OMV Aktiengesellschaft is one of Austria’s largest listed industrial companies. In Upstream, OMV has a strong base in Romania and Austria and a balanced international portfolio, with the North Sea, the Middle East & Africa and Russia as further core regions. 2017 daily production stood at approximately 348,000 boe/d. In Downstream, OMV operates three refineries with a total annual processing capacity of 17.8 mn tons and more than 2,000 filling stations in ten countries. OMV runs gas storage facilities in Austria and Germany; its subsidiary Gas Connect Austria GmbH operates a gas pipeline network in Austria. In 2017, gas sales volumes amounted to around 113 TWh. Sustainability is an integral part of the corporate strategy. OMV is set to invest EUR 500 mn in innovative energy solutions by 2025.