ADNOC Looking to Sell a Minority Stake in its Drilling Unit

Abu Dhabi National Oil Co. is close to hiring JPMorgan Chase & Co. and First Abu Dhabi Bank to help arrange the potential listing of its drilling business. ADNOC, as the company is known, is looking to sell a minority stake in its drilling unit in a deal that could value the business at up to $10bn, the people said, declining to be named because the matter is private. In 2018, when Baker Hughes bought a 5 per cent stake in ADNOC Drilling, that deal valued the company at about $11bn, including $1bn of debt. Alongside tapping new revenue sources, Abu Dhabi is looking to revive its dormant stock market by bringing in local or international investors. Government entities such as ADNOC, Mubadala Investment Co. and ADQ have also been exploring different ways to raise cash for their owner.

ADNOC’s drilling division is responsible for unlocking the UAE’s oil and gas resources on land and at sea, according to its website. It has a fleet of 95 rigs in the Middle East and a workforce of about 7,000 engineers. In recent years, international and local funds have invested more than $20bn in ADNOC assets such as pipelines and property. Last June, the company sold leasing rights over natural-gas pipelines to a consortium including Global Infrastructure Partners and Brookfield Asset Management, in a deal worth $10.1bn. Still, its sole IPO to date was the listing of its fuel-retailing unit, Abu Dhabi National Oil Co. for Distribution, in 2017.

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