The Abu Dhabi National Oil Company’s (ADNOC) one of the new trading entities, ADNOC Trading, has started derivatives trading as a direct market participant
This represents a major milestone for the company, as it moves from being a traditional marketer of its products to a more sophisticated global trader.
ADNOC has incorporated two trading units, ADNOC Trading (AT), which focuses on the trading of crude oil, and ADNOC Global Trading (AGT) a joint venture with ENI and OMV that will focus on the trading of refined products. The new offices of both AT and AGT are located in Abu Dhabi’s International Financial Centre at Abu Dhabi Global Market (ADGM).
ADNOC Trading is now operational and ADNOC Global Trading is on track in establishing the required processes, procedures and systems to begin operations in the coming months. The AGT trading team are already optimising ADNOC’s flows (crude, feedstock and product optimisation), and, as its new trading systems are finalised will ramp up its activities.
By entering trading, ADNOC is able to offer a broader range of services to its customers and capture more value through new revenue streams from the sale of its growing crude and refined products portfolio. This significant step is a critical enabler of ADNOC’s 2030 strategy and its drive to become a more commercially-driven and performance-led organisation.
Dr Sultan Ahmed Al Jaber, UAE minister of industry and advanced technology and ADNOC Group CEO, said, “The opening of our trading offices at Abu Dhabi Global Market (ADGM) further reinforces its position and reputation as a leading and growing commodities trading hub for our nation and the Middle East region.”
Ahmed Ali Al Sayegh, UAE Minister of State and Chairman of Abu Dhabi Global Market, added, “As an International Financial Centre, ADGM is committed to supporting ADNOC and Abu Dhabi institutions in their strategic development and future endeavors via our financial and business platforms. We will work closely together as one entity to propel the economic growth of Abu Dhabi and the UAE well into the future.”
The opening of its trading offices further demonstrates ADNOC’s resilience in overcoming the unprecedented challenges of the COVID-19 pandemic.
Safeguards are in place to oversee and track all trading activity. The trading systems used by AGT and AT have undergone thorough testing to ensure that they are ‘air-tight and water-tight’ before operations begin. In order to manage and control risk, the expert trading teams use a suite of energy trading and risk management systems that cover the full life cycle of every trade.
The establishment of ADNOC’s new trading entities is part of the company’s broader transformation in its customer-facing Marketing, Supply and Trading directorate (MS&T). ADNOC’s marketing arm is moving from a supplier that customers historically collected products from, to a more customer and market-centric, shipping & integrated logistics, storage and trading organisation. By better integrating its marketing related companies and capabilities, ADNOC will provide a broader service to its customers, better manage and optimise its product flows and ultimately deliver greater value to its customers, its shareholders and the UAE.
