ADNOC’s expansion into Europe: 7 landmark deals diversifying its energy operations

State-owned Abu Dhabi National Oil Company (ADNOC) is strategically expanding its presence in Europe through a series of high-profile deals, targeting various sectors from chemicals to renewable energy.

Here’s a look at the seven key deals and discussions that are shaping ADNOC’s European footprint:

1. Covestro takeover talks: ADNOC is in advanced negotiations with German chemicals giant Covestro over a potential EUR11.7bn($12.55bn) takeover. The energy giant has been in talks with Covestro for over a year and has made a final offer of EUR62 ($66.62) per share.If successful, this acquisition will enhance ADNOC’s capabilities in producing plastics and chemicals essential for construction and engineering, aligning with Covestro’s growth strategies and expanding ADNOC’s reach in the chemicals sector.
2. Stake in Austrian OMV: In March 2023, ADNOC acquired a 24.9 per cent stake in Austrian oil and gas group OMV from Abu Dhabi’s Mubadala Investment Company. This acquisition, although financial details were not disclosed, positions ADNOC as a significant shareholder in OMV.This investment strengthens ADNOC’s influence in the European oil and gas market and supports its strategy of diversifying into different geographies and operational areas.
3. Borealis and Borouge merger discussions: ADNOC, together with OMV, is exploring a potential $30bn merger of their respective stakes in Borealis and Borouge. Borealis, a leading petrochemical company, is jointly owned by OMV and ADNOC, while Borouge is a listed company with a majority stake held by ADNOC.Merging these entities would create a petrochemical powerhouse, allowing ADNOC to capitalise on synergies and bolster its position in the global chemicals market.
4. Majority stake in Fertiglobe: ADNOC agreed to acquire OCI’s 51 per cent stake in Fertiglobe for $3.62bn, increasing its shareholding to 86.2 per cent. Fertiglobe is a major producer of ammonia and urea, crucial for fertilizer production. This acquisition solidifies ADNOC’s leadership in the global fertilizer market and enhances its role in the agricultural supply chain, supporting food security initiatives.
5. 15-Year LNG supply agreement with SEFE: ADNOC signed a 15-year deal with SEFE, a German energy company, to supply 1 million metric tonnes per annum (mmtpa) of LNG from its Ruwais LNG plant, starting in 2028.This agreement underscores ADNOC’s expansion drive to becoming a key player in the global LNG market, and supports Germany’s energy security and transition towards lower-carbon energy sources, post the Ukraine crisis.
6. LNG supply deal with EnBW: Similar to the SEFE agreement, ADNOC will supply 0.6 mmtpa of LNG to German utility EnBW from its Ruwais LNG facility, commencing in 2028. This deal reinforces ADNOC’s role in Europe’s energy landscape, providing a reliable supply of LNG as the continent shifts away from Russian gas and strengthens its energy diversification efforts.
7. Acquisition of stake in Absheron Gas Field: ADNOC acquired a 30 per cent stake in the Absheron gas and condensate field in Azerbaijan’s Caspian Sea, marking its first significant venture into the international upstream gas market. This acquisition not only diversifies ADNOC’s asset base beyond the UAE but also enhances its capacity to meet growing gas demands in Europe, particularly for NATO member states.

By securing these strategic deals, ADNOC is not only diversifying its operations but also positioning itself as a key player in Europe’s evolving energy landscape, with significant implications for both traditional and renewable energy markets.