Sultan Al Jaber, UAE Minister of State; and Group CEO, Abu Dhabi National Oil Company (ADNOC) : Interview

Interview: Sultan Al Jaber

How have the shifting trends in global energy demand impacted ADNOC’s business model?

SULTAN AL JABER: Global demand for energy continues to grow, but the demand dynamic is shifting from west to east. By 2040 non-OECD countries are set to account for over 70% of global demand, adding almost the equivalent current energy use of North America and Europe combined. A significant driver of this increased demand is the petrochemicals segment, which is set to expand by 60% over the same timeframe, making it one of the fastest-growing areas in the wider energy value chain.

While hydrocarbons will remain essential for fuelling the global economy for decades to come, the fundamentals of the energy landscape have shifted, bringing an end to the era of “business as usual”. We have embraced these new realities by keeping an unwavering focus on efficiency and maximising the value of every barrel we produce. Upstream will remain a fundamental and core part of our business, but we are also looking to grow our downstream business. To achieve this, we are seeking to expand our range of high-value products by building new downstream business lines and facilities, and securing market access by investing directly into new international growth centres.

In what ways is ADNOC engaging investors?

AL JABER: Since 2016 ADNOC has taken a dual-track approach to ensure it is resilient to market volatility and well positioned to capitalise on emerging industry trends. The listing of 10% of ADNOC Distribution in December 2017 underlines the commerciality we are applying to every aspect of our business. Our 2030 Strategy aims to build a more profitable upstream, valuable downstream and sustainable economic gas supply. All of this will be underpinned by more proactive and adaptive marketing and trading. As ADNOC continues to execute its new partnership and investment strategy, we will consider further potential initial public offerings of minority stakes in select ADNOC businesses, as well as further potential debt capital markets and other financing opportunities.

What is being done to foster local participation?

AL JABER: ADNOC’s in-country value (ICV) programme seeks to nurture new local partnerships and opportunities, catalyse socio-economic growth and improve knowledge transfer. It will also support the continued sustainable growth of the UAE’s private sector by encouraging closer collaboration between domestic and international firms, in turn enhancing local competitiveness. Today, all business partnerships with ADNOC include an ICV assessment as part of the tender evaluation and award process to encourage the use of local goods, services and manufacturing, and the employment of Emiratis, to stimulate economic diversification and growth. In time, our ICV strategy will ensure that local businesses are well positioned to work with us on upcoming projects that support our bold plans. ADNOC has committed to a new capital expenditure plan of more than $100bn from 2018 to 2022 and we will look to work with as many UAE companies as possible to maximise the use of local players.

How is ADNOC harnessing emerging technologies and applications to enhance its operations?

AL JABER: As part of our ongoing transformation we are utilising advanced technologies and applications such as machine learning, neural networks and predictive data to increase productivity and unlock new solutions that will make us more agile. This is shaping the future of the oil and gas value chain. For example, our Panorama Digital Command Centre collates realtime information from across ADNOC’s operations and businesses, and uses big data to generate operational insights and determine ways to optimise performance. This type of model enables us to develop solutions to subsurface challenges, including increasing productivity, reducing drilling costs and improving rig efficiencies.