ADNOC, Borealis raise over $2 bil from JV IPO as UAE monetizes energy assets

Abu Dhabi National Oil Co. and Austria's petrochemical company Borealis have raised over $2 billion from the initial public offering of their joint venture as the UAE's state-owned oil producer boosts spending to finance its energy projects.

ADNOC and Borealis sold a 10% stake in their joint venture Borouge, the UAE's biggest petrochemical company, and will list the unit on the Abu Dhabi Securities Exchange June 3, the oil producer said in a May 31 statement.
ADNOC will continue to own a majority 54% stake in Borouge following its listing, while Borealis will hold a 36% stake.

In April, ADNOC said it had bought a 25% stake in Borealis from the UAE sovereign wealth fund Mubadala Investment Co. Mubadala holds a 24.9% stake in Austria's OMV, which will own the remaining 75% interest in Borouge.

Since 2019, ADNOC has been monetizing its oil and gas assets as it seeks to unlock cash to fund strategic projects, including increasing oil output capacity to 5 million b/d by 2030, from about 4 million b/d, currently.

ADNOC is forging ahead with an expansion of its hydrocarbons and low-carbon businesses under a plan to spend Dirham 466 billion ($127 billion) over 2022-2026. The company's previous five-year capital expenditure plan was for $122 billion.

Fourth IPO

The Borouge IPO is ADNOC's fourth flotation of a unit. ADNOC has already sold stakes in its fuel retail arm ADNOC Distribution, ADNOC Drilling and fertilizer company Fertiglobe as it seeks to raise money to spend on growth projects.

Earlier this year, ADNOC and Borealis announced the startup of a new polypropylene unit that will boost total polymer capacity of polyolefins by 11% at Borouge, ahead of a 2024 launch of a $6.2 billion expansion.

The commencement of operations at its fifth PP unit will boost the commodity's production capacity by 25% to 2.24 million mt/year and its total polymer capacity of polyolefins by 11% to 5 million mt/year.

The Borouge 4 project, which is expected to become operational in 2025, includes the construction of a 1.5 million mt/year ethane cracker and two polyethylene plants. The project will become the world's largest single-site polyolefin complex at 6.4 million mt/year.

Platts assessed PP Injection grade CFR Far East Asia at $1,100/mt at the Asian close May 30, unchanged on the day, S&P Global Commodity Insights data showed.

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