The companies called their deal part of a plan to expand Adnoc operations, including its refining complex in Al Ruwais, United Arab Emirates, which has a base oil plant.
Italian energy company Eni now owns 20 percent of Adnocs refining business, while OMV, of Austria, has 15 percent. The companies also agreed to form a trading joint venture with the same ownership split.
Officials said the transaction will provide capital that will be used to expand operations and to optimize the profitability of the businesss product slate.
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, U.A.E. Minister of State and Adnoc Group CEO Sultan Ahmed Al Jaber said in a press release. They will help enable our objective of unlocking even more value from every barrel of oil we produce.
Lubricating base stocks have relatively high margins compared to other refined products. The Al Ruwais base oil plant is one of the worlds newest, having opened in 2016 with capacity to make 500,000 metric tons per year of API Group III base oils and 100,000 t/y of Group II oils. Adnoc has said that the Murban crude oil that it feeds into Al Ruwais is particularly well-suited for making high quality base oil, and officials have expressed interest in expanding its capacity.
Sundays press release did not mention base oils, but the companies said Adnocs refining business will expand in the short to mid-term. The trading joint venture will be incorporated and begin operating as early as next year.
The transaction valued Adnoc at $19.3 billion.