Agreement of 3,3 billion dollars

ENI acquires 20% of Adnoc Refining

Marketing - Wednesday, 30 January 2019

Eni and Adnoc signed on January 27 a share purchase agreement to enable Eni to acquire from Adnoc a 20% equity interest in Adnoc Refining. The signing of the agreement was witnessed by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Giuseppe Conte, the Italian Prime Minister. The agreements were signed by His Excellency Dr Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc Group CEO, and Claudio Descalzi, Eni CEO. Adnoc also announced today that it sold to OMV (the largest Austrian oil producer and refiner) a 15% equity interest in Adnoc Refining, with Adnoc retaining the remaining 65%. Adnoc, Eni and OMV also agreed to establish a Trading Joint Venture with the same shareholding of Adnoc Refining.

The agreed terms for the 20% equity interest acquired by Eni include a cash price of approximately 3.3 dollars billion after deduction of the net debt and subject to closing adjustments, which corresponds to an enterprise value of approximately 3.9 billion dollars (Eni share). The acquisition will be completed subject to satisfaction of a number of conditions precedent, including clearance from UAE and other regulatory authorities.

This is one of the largest ever refinery transactions and reflects the scale, quality, and growth potential of Adnoc Refining’s assets, coupled with an advantageous location from which to supply markets in Africa, Asia and Europe. Adnoc Refining operates three refineries in Ruwais (Ruwais East and Ruwais West) as well as Abu Dhabi (Abu Dhabi Refinery), with a total refining capacity in excess of 900 thousand barrel per day.

The Ruwais complex ranks fourth worldwide in terms of capacity and provides for a high conversion factor using “state-of-the art” technologies and a deep conversion process scheme. The complex has already demonstrated a resilient refining margin thanks to its competitive advantage in terms of integration, economy of scale, complexity and efficiency of the plants, proximity to the upstream fields which supply the crude and gas feedstock, and barycentric position to Eastern and Western markets. Furthermore, a development plan is already defined to further improve the complex’s competitiveness and profitability by increasing the flexibility of crude supply and energy efficiency.

Eni will contribute to the technological development of the complex having already matured, in its European refineries, a vast experience in similar processes (such as fluidized catalytic cracking, hydrocracking, residue conversion and desulphurization, coking and others) and in the optimization activities to maximise the margin of refined barrels. This acquisition will allow Eni to further strengthen the resilience of its refining business by reducing the overall Eni’s refining break even target margin by 50% down to around 1,5 $/bl.

Further value will be created as Eni and OMV join Adnoc in setting up a new trading joint venture, with the same equity shareholdings as the Adnoc Refining partnership. Once established, the trading joint venture will be an international exporter of Adnoc Refining’s products, with export volumes equivalent to approximately 70% of throughput. Domestic supply within the UAE will continue to be managed by Adnoc.

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