E & P - NEWS
ADNOC to continue to Focus Smart Growth through Strategic Partnerships
His Excellency Dr . Sultan Ahmed Al Jaber , UAE Minister of Industry and Advanced Technology and Group CEO of the Abu Dhabi National Oil Company ( ADNOC ), today shared insights on energy market dynamics , the energy transition , and ADNOC ’ s future strategy during a virtual session of the Energy Intelligence Forum .
Speaking with Alex Schindelar , President of Energy Intelligence , during a leadership dialogue , H . E . Dr . Al Jaber said : “ When it comes to managing the economic impact of Covid , it really comes down to the fact that we are realizing the benefits of the transformation we started four years ago . Over this period we have focused on improving our performance and strengthening our agility while always reinforcing efficiency throughout our business . Most importantly we have focused on what we can control and that is our costs .
“ Going forward , we will continue to focus on developing our upstream resources and expanding our downstream footprint here in the UAE , while maximizing value through creative partnerships . In addition , we are further strengthening our marketing and trading capabilities . Last month we completed our first derivatives trade , marking the beginning of a new era for ADNOC as an active trader .”
Commenting on how ADNOC and Abu Dhabi have continued to attract investment in 2020 following ADNOC ’ s multi-billion dollar deals , H . E . Dr . Al Jaber said the deals were as a result of the fact that the UAE has created a safe , reliable , and stable business environment , underpinned by a unique partnership model . He noted this business environment is very attractive to the global investment community who view the UAE as a highly trusted , go-to investment destination .
H . E . Dr . Al Jaber added that “ these transactions have highlighted the world-class nature of Abu Dhabi ’ s and ADNOC ’ s energy assets and infrastructure base , together with their low-risk and high return profile .”
Responding to a question on ADNOC ’ s strategy behind monetizing assets , H . E . Dr . Al Jaber said ADNOC ’ s strategy is very much focused on unlocking value and driving growth through smart , creative partnerships . He stressed ADNOC “ will continue to leave no stone unturned to maximize value from across our portfolio .”
H . E . Dr . Sultan noted that while no one is in a position to predict what the shape of economic recovery will look like over the next few months given that there are multiple variables at play , the long-term structural market for oil and gas is very robust , with demand expected to increase to 109 million barrels per day over the next 25 years , in line with global economic growth .
He went on to highlight the role of the Organization of the Petroleum Exporting Countries ( OPEC ) in balancing oil markets since the markets reached its low point in March while stressing the UAE is complying with its production quota agreed with OPEC plus .
“ I must commend our partners in OPEC plus for their collective efforts to balance supply and demand during this critical period . As part of this effort , the UAE continues to adhere closely to all agreed cuts . In fact , we achieved well over 100 percent compliance this past month and these measures are having a positive impact on market confidence ,” H . E . Dr . Al Jaber said .
Speaking on ADNOC and the UAE ’ s approach to COVID-19 , H . E . Dr . Al Jaber explained how the country ’ s robust response has focused on a safety-first approach to “ test early , test often and test again and again .”
“ The UAE has carried out over 10 million tests so far – that ’ s more than one test for every citizen and resident of our country . This great public health effort makes the UAE the first country in the world where the number of COVID tests exceeds the population and it is a testament to t he careful and prudent guidance of our wise leadership ,” H . E . Dr . Al Jaber said .
ADNOC has followed this example closely and the company ’ s strong health , safety , and environment ( HSE ) culture has been instrumental in handling the pandemic from a health perspective , H . E . Dr . Al Jaber said . He explained that ADNOC has successfully managed the economic impact of Covid as a result of its transformation which was started four years ago and this has enabled the company to maintain uninterrupted operations throughout this period and deliver on its strategic objectives .
H . E . Dr . Al Jaber also shared his perspective on the energy transition and outlined how ADNOC is preparing for the future energy landscape . He emphasized that in 2030 , oil and gas will remain at the heart of ADNOC ’ s business model because even in the most fast-paced transition scenario , hydrocarbons will still provide over half the world ’ s energy needs .
He explained that this reality underscores ADNOC ’ s commitment to expanding its crude oil production capacity to 5 million barrels per day by 2030 while driving gas self-sufficiency for the UAE . •
Enterprise and Customers Amend Crude Oil Agreements ; Enterprise Cancelling Midland to Echo 4 Pipeline
Enterprise Products Partners L . P . ( NYSE : EPD ) today announced that it and certain of its customers have amended agreements that provide Enterprise the ability to use the partnership ’ s existing pipelines to support its crude oil transportation agreements and to cancel the 450,000 barrels per day Midland-to-ECHO 4 crude oil pipeline project (“ M2E4 ”). Generally , the amendments provide for the reduction of near term volume commitments in exchange for extending the term of the agreements .
The cancellation of M2E4 will reduce aggregate growth capital expenditures for 2020 , 2021 and 2022 by approximately $ 800 million . Based on currently sanctioned projects , we expect growth capital expenditures , net of contributions from joint venture partners , for 2020 , 2021 and 2022 to be approximately $ 2.8 billion , $ 1.6 billion and $ 900 million , respectively . These estimates do not include capital investments associated with our proposed deep water offshore crude oil terminal (“ SPOT ”), which remains subject to governmental approvals . We do not expect to receive the approvals for SPOT in 2020 . As a result of the cancellation , Enterprise expects to record an impairment charge of approximately $ 45 million to its earnings for the third quarter of 2020 .
“ We are very proud of our commercial team for responding and working with our customers to amend these long-term agreements ,” said A . J . “ Jim ” Teague , co-CEO of Enterprise ’ s general partner . “ This is another example of Enterprise working with customers for a ‘ win / win ’ solution that allows our customers and Enterprise to better allocate capital during the challenging times of the current economic cycle while retaining long-term , fee-based volumes and revenues for our assets . The capital savings from the cancellation of M2E4 will accelerate Enterprise toward being discretionary free cash flow positive , which would give us the flexibility to reduce debt and return additional capital to our partners , including through buybacks .”
Enterprise Products Partners L . P . is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas , NGLs , crude oil , refined products and petrochemicals . Our services include : natural gas gathering , treating , processing , transportation and storage ; NGL transportation , fractionation , storage and export and import terminals ; crude oil gathering , transportation , storage and export and import terminals ; petrochemical and refined products transportation , storage , export and import terminals and related services ; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems . The partnership ’ s assets include approximately 50,000 miles of pipelines ; 260 million barrels of storage capacity for NGLs , crude oil , refined products and petrochemicals ; and 14 Bcf of natural gas storage capacity . •
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