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JPMorgan, FAB Poised to Win Roles on Adnoc Drilling Unit IPO

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Archana Narayanan, Nicolas Parasie and Dinesh Nair
·2 min read
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(Bloomberg) -- Abu Dhabi National Oil Co. is close to hiring JPMorgan Chase & Co. and First Abu Dhabi Bank PJSC to help arrange the potential listing of its drilling business, according to people familiar with the matter.

Adnoc, as the company is known, is looking to sell a minority stake in its drilling unit in a deal that could value the business at up to $10 billion, the people said, declining to be named because the matter is private. In 2018, when Baker Hughes bought a 5% stake in Adnoc Drilling, that deal valued the company at about $11 billion, including $1 billion of debt.

Although the state energy firm has yet to award formal mandates, the two banks are in pole position for a role on the IPO at the Abu Dhabi Securities Exchange, the people said. Adnoc may also appoint additional advisers, they said.

Adnoc and JPMorgan declined to comment. FAB didn’t immediately respond to emails seeking comment.

Alongside tapping new revenue sources, Abu Dhabi is looking to revive its dormant stock market by bringing in local or international investors. Government entities such as Adnoc, Mubadala Investment Co. and ADQ have also been exploring different ways to raise cash for their owner.

Adnoc and chemical producer OCI NV have started preparing for a potential IPO in Abu Dhabi of their fertilizer joint venture called Fertiglobe, while wealth fund Mubadala hired advisers for the listing of satellite operator Yahsat.

Abu Dhabi is the capital of the United Arab Emirates and holds most of the country’s crude deposits. The UAE is the third biggest producer in the Organization of Petroleum Exporting Countries, behind Saudi Arabia and Iraq.

Unlocking Resources

Adnoc’s drilling division is responsible for unlocking the UAE’s oil and gas resources on land and at sea, according to its website. It has a fleet of 95 rigs in the Middle East and a workforce of about 7,000 engineers.

In recent years, international and local funds have invested more than $20 billion in Adnoc assets such as pipelines and property. Last June, the company sold leasing rights over natural-gas pipelines to a consortium including Global Infrastructure Partners and Brookfield Asset Management Inc., in a deal worth $10.1 billion.

Still, its sole IPO to date was the listing of its fuel-retailing unit, Abu Dhabi National Oil Co. for Distribution PJSC, in 2017.

(Updates with Fertiglobe’s IPO announcement in sixth paragraph.)

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