TotalEnergies, Adnoc mull UAE diesel supply to France

TotalEnergies and Abu Dhabi's state-owned oil firm Adnoc are looking at working together on supplying UAE diesel to France as part of a new strategic partnership agreement.

The deal — which coincides with a state visit to Paris by new UAE president Mohammed bin Zayed (MBZ) al-Nahyan — also includes jointly evaluating opportunities for new oil and gas developments in the UAE and assessing the possibility of a carbon capture, utilisation and storage (CCUS) project in the Mideast Gulf country.

A steady stream of UAE diesel would help France to wean itself off Russian supplies ahead of an EU ban of Russian refined product imports that comes into effect early next year. The UAE exported about 12,000 b/d of diesel to France in the first half of this year, 63pc higher than the same period of 2019 before the Covid-19 pandemic, according to Vortexa data. Adnoc's refineries have been maximising gasoil production at the expense of jet fuel since the onset of the pandemic.

The deal with TotalEnergies will give Adnoc an opportunity to capture more market share in Europe, where it fiercely competes with Saudi Arabia. Most of the UAE's refined product exports head to Africa at the moment.

It is not clear if Adnoc will allow TotalEnergies to resell its diesel supplies. If that were the case, France could play an important role in helping other European countries replace Russian diesel. Adnoc declined a request for further details of the deal, such as quantity and delivery dates of the diesel supplies.

TotalEnergies already has a strong presence in the UAE, with oil and gas production of 280,000 b/d of oil equivalent last year. It holds stakes in Adnoc's onshore and offshore oil and gas concessions, as well as LNG, gas processing and shipping operations, and a 24.5pc interest in Abu Dhabi's Dolphin Energy, which pipes Qatari gas to the UAE and Oman.

By Ruxandra Iordache and Sarah Raffoul