For years, Abu Dhabi’s main oil producer was known as a sleepy state company content to churn out crude from its vast oil fields. But that stodgy reputation is getting a dramatic makeover as it uses a $150 billion budget to become one of the world’s most active energy dealmakers.
Abu Dhabi National Oil Co. this week took a big step in its global push by suggesting it could raise an offer for German chemicals maker Covestro AG to about $12.5 billion. It’s already strung together a number of smaller deals, but a Covestro purchase would be the biggest international acquisition by a Gulf company and announce Adnoc’s ability to pay top dollar to match its outsized goals.
The Gulf company’s ambitions were fired up about eighteen months ago at a board meeting inside Adnoc’s glass-clad skyscraper overlooking the blue Gulf waters along Abu Dhabi’s corniche. There UAE President Sheikh Mohammed bin Zayed Al Nahyan boosted the company’s budget by nearly a fifth to increase oil and gas production capacity and to snap up assets in chemicals, gas and clean energy across the globe.
Since then the flow of bankers from around the world to Adnoc’s doorstep has surged, with some even proposing what would have been an audacious move for oil major BP Plc, according to people familiar with the matter. While the BP idea never advanced, Adnoc continues to be among the most aggressive companies in searching for energy deals, according to the people.
