ADNOC Gas listed on the Abu Dhabi Stock Exchange on March 13, 2023. This stock market operation is the largest ever carried out in the Gulf emirate, and will enable ADNOC Gas to raise more than 2.3 billion euros. This subsidiary of the Emirati oil giant Abu Dhabi National Oil Company (ADNOC), was created earlier this year to consolidate the emirate’s gas and liquefied natural gas (LNG) operation, maintenance and marketing activities.
Massive oversubscription for the initial public offering
The initial public offering was oversubscribed 50 times, generating more than $116 billion in investor demand. To meet this strong demand, ADNOC Gas had increased its offer to about 5% of its capital, against 4% initially planned, with the parent company retaining 90% of the shares. This massive oversubscription suggests strong investor interest once the shares are listed.
Gas, a growing energy source
ADNOC Gas’ IPO comes at a time of renewed activity in the gas market, one year after Russia invaded Ukraine on February 24, 2022. This conflict has caused Russian gas deliveries to plummet, prompting Europeans to look for alternatives. Gas is also considered to be cleaner than other fossil fuels, such as coal or oil. LNG has been described as “the most important transitional fuel in the context of exiting from hydrocarbons” by energy consultant Roudi Baroudi of Qatar-based Energy and Environment Holding.
A promising prospect for the energy sector
The United Arab Emirates produced 57 billion cubic meters of natural gas in 2021, about 1.4% of global production, while LNG exports amounted to 8.8 billion cubic meters, accounting for nearly 1.7% of global trade, according to the bp Statistical Review of World Energy. “As global efforts to combat climate change intensify, the role of natural gas in general … is set to grow significantly,” Baroudi added.
An IPO that could herald others
ADNOC Gas’ IPO could be the first in a series of IPOs on the Abu Dhabi Stock Exchange this year.
According to Sameh Al Qubaisi, head of the emirate’s economic department, quoted by Bloomberg, at least eight companies are expected to follow, in sectors ranging from new technologies to regenerative medicine to asset management.
