Abu Dhabi National Oil Co is in talks with the biggest refining companies in Thailand and Africa to invest in their businesses as it looks to secure customers for its crude and expand fuel trading, according to people with knowledge of the situation.
The Abu Dhabi company is seeking a stake in refineries run by units of Thailand’s PTT Pcl in a deal that would include contracts to supply crude and give Adnoc access to fuels from the facilities that it would then sell to other buyers, according to the people, who asked not to be named discussing private deliberations. A deal could be announced later this year, they said.
Adnoc is also in talks with Nigeria’s Dangote about taking stakes in its refinery operations, according to the people. The company founded by billionaire Aliko Dangote operates Africa’s largest refinery in Nigeria and is also planning to build a facility in the continent’s east.
Dangote has received approaches from many large players, said a senior executive at the company, who declined to comment on Adnoc specifically. Adnoc and PTT didn’t respond to requests for comment.
Building an international refining business is a change of strategy for Adnoc, with the company so far relying on its Ruwais facility at home, one of the world’s largest processors, to supply fuels globally. But it’s now considering deals as part of a plan to secure buyers for its own and other crudes, and to bolster its trading business. The war in the Middle East that’s upended supply through the Strait of Hormuz has also highlighted the importance of expanding operations outside the Persian Gulf.
Overseas refinery deals would add to Adnoc’s multi-billion-dollar international push, following unit XRG’s transactions for natural gas assets from the US to Africa and Central Asia, and the acquisition of German chemical-maker Covestro AG. Subsidiary Adnoc Distribution in July agreed to buy Shell Plc’s fuel retail operations in South Africa.
Its closest competitor among Middle Eastern oil producers, Saudi Aramco, already has substantial investments in international refining, notably the giant Motiva facility in the US and stakes in several Chinese plants that allow the Saudi company to boost oil exports to the Asia’s biggest economy.
For Adnoc, Thai refineries that use heavier crudes could be a good fit for oil grades from Abu Dhabi’s offshore fields, the people said. Adnoc’s trading arm could also buy crude produced by other countries, such as Iraq, to supply those refineries, they said.
Adnoc is also interested in entering the downstream market in India, where it has previously struggled to gain a foothold. In 2018, the company piggy backed onto a Saudi Aramco deal to buy a stake in India’s Reliance Industries Ltd’s refining business, but talks never led to a transaction.
A potential east African refinery deal could also include stakes in a crude oil pipeline connecting the planned refinery in Lamu to Kenyan oil fields in the north, according to the people familiar with the talks. Adnoc has previously purchased African crude, including Nigerian barrels, for trading and has sold fuels like gasoline and diesel to countries including Kenya and Ethiopia.
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