ADNOC Marketing Suppply and Trading presented details of the company’s decision to adopt a new pricing mechanism for its Murban crude, which will see it move from a retroactive official selling price (OSP) to market-driven, transparent, forward pricing. The new Murban Crude forward pricing mechanism will use a market-driven futures contract as its price marker, enabling customers and the market to better price, trade, and manage their crude requirements. The company expects to implement the new pricing mechanism around the second quarter of 2020.
Delegates were also briefed on the establishment of a new exchange in Abu Dhabi, ICE Futures Abu Dhabi, and provided further details of other initiatives ADNOC is pursuing to become a more proactive and adaptive marketer and trader, in the areas of shipping, storage and trading.
ADNOC was joined at the forum by special guest speaker, Intercontinental Exchange’s Founder, Chairman and CEO, Jeffrey Sprecher, who, following Monday’s announcement of the establishment of a new futures exchange in Abu Dhabi, gave his perspectives on why the move is so significant for Abu Dhabi, the UAE and the global energy market.
Khaled Salmeen, Director of Marketing, Supply and Trading (MS&T) at ADNOC said: “Today’s forum provided an opportunity for global industry leaders to learn about ADNOC’s strategic approach to marketing, supply and trading and to gain detailed insights into the progress we are making in delivering our ambitious MS&T growth plans.
“Under the leadership oif His Excellency Dr Sultan Ahmed Al Jaber, ADNOC’s Group CEO, MS&T is being transformed into a more sophisticated, dynamic and fully integrated marketing, supply and trading organization, ultimately unlocking and delivering more value to our customers and ADNOC.”
The forum heard how MS&T’s strategy focuses on three core pillars - shipping, storage and trading. In shipping, ADNOC Logistics and Services is expanding its fleet and services so that in addition to offering a collection service in the UAE for crude and refined products, ADNOC can ship to customers around the world.
ADNOC has also enhanced its global storage capabilities by acquiring 10% of global storage terminal operator, VTTI. This investment brings ADNOC nearer to existing and potential customers around the globe, allowing ADNOC to be more responsive to their needs.
The plans also include entering trading, through which ADNOC can capitalize on the company’s growing crude and refined products portfolio and more nimbly take advantage of changing market dynamics, and better manage flows, assets and risks. Earlier this year, ADNOC launched two new trading units – ADNOC Trading, which will trade crude oil, and ADNOC Global Trading, ADNOC’s trading joint venture with ENI and OMV, which will focus on trading refined products from ADNOC Refining.
Forum speakers shared insightful perspectives on macro trends affecting the global energy economy and took part in a lively panel discussion on the transformation of the global trading landscape and emerging issues and opportunities in the global crude and products markets.
Speakers at the Forum included Helima Croft, Managing Director and Global Head of Commodity Strategy, Global Research, RBC Capital Markets; Jeffrey Sprecher, Chairman and CEO, Intercontinental Exchange and Chairman, New York Stock Exchange; Kayo Fujiwara, Executive Officer, General Manager, Crude Trading and Shipping Department, JXTG; Russell Hardy, Group CEO, Vitol; Philippe Khoury, Executive Vice President, Trading, ADNOC; Disathat Panyarachun, Senior Executive Vice President, International Trading, PTT; Shigeharu Yajima, Director, Senior Managing Executive Officer, INPEX Trading; and Manus Cranny, Anchor, Bloomberg.
ADNOC is one of the world’s leading diversified energy and petrochemicals groups with a daily output of about 3 million barrels of oil and 10.5 billion cubic feet of natural gas. With 14 specialist subsidiary and joint venture companies, ADNOC is a primary catalyst for the UAE’s growth and diversification.
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