Abu Dhabi’s ADNOC Launches New Lower-Carbon Energy and Chemicals Firm

Abu Dhabi National Oil Company (ADNOC) is setting a bold new direction in the global energy landscape with the launch of XRG, an international investment firm focused on lower-carbon energy and chemicals. With an estimated enterprise value exceeding $80 billion, ADNOC’s announcement on Wednesday marks the next chapter for the UAE’s energy sector, which has long been a leader in global oil production.

XRG, slated to begin operations in the first quarter of 2025, will concentrate on creating transformational investments across three key platforms: natural gas, chemicals, and lower-carbon energy solutions. The new company will operate independently from ADNOC but will benefit from its extensive resources and expertise.

Key Strategic Platforms

- Global Chemicals Division: XRG aims to become a top 5 global chemicals player, producing essential products needed for modern life. With the global chemicals market projected to see a 70% increase in demand by 2050, XRG’s Global Chemicals division will play a vital role in meeting this surge.

- International Gas Platform: This division will create a world-scale integrated gas portfolio to address the expected 15% increase in global natural gas demand over the next decade. It will also cater to the anticipated 65% growth in LNG demand by 2050, positioning gas as a key component in the lower-carbon transition.

- Low Carbon Energies Division: Focused on accelerating the energy transition, this division will invest in decarbonization technologies and solutions that are critical for driving economic growth while meeting the rising demand for low-carbon energies. The market for low-carbon ammonia, for example, is projected to grow substantially by 2040.

Sultan Ahmed Al Jaber, ADNOC’s Managing Director and Group CEO, emphasized the company’s commitment to long-term value creation and reinforcing the UAE’s leadership in global energy and chemicals. This announcement comes shortly after ADNOC’s $15.5 billion deal to acquire Germany’s chemical giant, Covestro.

Russia’s Surge in Refined Petroleum Exports

Meanwhile, Russia has seen a notable rise in its refined petroleum exports, hitting their highest level in eight months. Data compiled by Bloomberg shows that during the first 20 days of November, Russian refined fuel exports surged by 18%, averaging 2.3 million barrels per day (bpd) compared to October. The increase follows the end of autumn maintenance season at refineries, which boosted crude processing rates.

While refined product exports soared, Russia’s crude oil shipments saw a decline of 150,000 bpd, the steepest drop since July. The decline primarily affected Russia’s Western ports on the Baltic and Black Seas, with many shipments destined for India. Analysts are closely monitoring Russia’s crude production and processing levels, which have been classified since the country’s invasion of Ukraine.

Russian diesel and naphtha exports in particular showed a significant rise, with shipments increasing by the most since March and July 2023, respectively. Experts anticipate that refined product exports will continue to climb as Russia plans to lift its gasoline export ban earlier than expected, possibly by the end of the year.