Adnoc offers more shares in drilling subsidiary

Abu Dhabi's state-owned oil firm Adnoc has increased the stake available in its drilling subsidiary ahead of next month's public listing on the domestic stock exchange.

The original plan was to sell 7.5pc of Adnoc Drilling in the initial public offering (IPO) at an offer price of $0.626, corresponding to $751mn. But in light of "significant investor demand and the considerable oversubscription", Adnoc has decided to raise the share capital on offer to 11pc.

The offer price remains unchanged, which means Adnoc will now be able to make more than $1.1bn to help fund Abu Dhabi's energy expansion and transition plans. Subscriptions are due to close on 26 September, and Adnoc Drilling is expected to list on the Abu Dhabi Securities Exchange on 3 October.

The offer price values the drilling unit at $10bn. Adnoc, which accounts for the bulk of the UAE's oil production, will own a majority 84pc stake. US oil service firm Baker Hughes already has a 5pc share. US rig owner and designer Helmerich & Payne agreed earlier this month to be a long-term shareholder in Adnoc Drilling with a $100mn cornerstone investment in the IPO.

The sale of a minority share in the drilling unit will support Abu Dhabi's goal to boost crude production capacity to 5mn b/d by 2030 from just over 4mn b/d now, help the UAE reach its 2030 gas self-sufficiency target and unlock new unconventional oil and gas resources.

By Adal Mirza