Introducing ADNOC’s New Low-Carbon Energy Investment Firm
The oil and gas sector is taking significant strides towards a more sustainable future.
ADNOC is at the forefront of this, launching XRG — a new subsidiary with a hefty $80bn commitment towards global investments in lower-carbon energy and chemicals.
ADNOC says: “The world needs more energy, with fewer emissions, for more people than ever before. Enter XRG.
“We are investing across three platforms – chemicals, gas and low-carbon energies – on an unprecedented scale, building on a US$80bn portfolio of assets to enable a smarter, cleaner and more sustainable energy future.”
XRG: Redefining energy
As expected with a US$80bn portfolio of assets, the vision for the new business is big.
Dr Sultan Ahmed Al Jaber, ADNOC Managing Director and Group CEO, says: “In line with our Board mandate to prioritise transformational growth, XRG marks a bold new chapter for ADNOC.
“Building on our unrivalled track record in energy and investments, network of global partners and strategic market access, XRG will drive sustainable economic growth, foster technological innovation and deliver the energy and products needed to improve lives around the world.”
According to ADNOC, XRG “aims to more than double its asset value over the next decade by capitalising on demand for low-carbon energy and chemicals driven by three megatrends: the transformation of energy, exponential growth of AI, and the rise of emerging economies”.
The Sultan adds: “We are committed to delivering long-term value for our stakeholders and reinforcing Abu Dhabi and the UAE’s role as a global energy and chemicals leader.’’
Three Pillars of Strategic Growth
ADNOC says the independently-operated new business will build on its expertise and “transformational international acquisitions”, focussing initially on developing three core strategic value platforms:
- Global Chemicals platform: aims to be a “top 5 global chemicals player”, producing and delivering chemical and specialty products “essential for modern life”, to meet the projected 70% increase in global demand by 2050
- International Gas platform: designed to build a “world-scale integrated gas portfolio to help meet the anticipated 15% increase in global natural gas demand over the next decade, as a lower-carbon transition fuel”, as well as meet the expected 65% increase in demand for LNG by 2050
- Low Carbon Energies platform: will invest in the solutions needed to meet increasing demand for low-carbon energies and decarbonisation technologies to drive economic growth through the energy transition. ADNOC says: “The market for low carbon ammonia alone is expected to grow by between 70-90 million tonnes per annum by 2040, from close to zero now.”
XRG in numbers
With its ambitious objective of more than doubling its asset value in the coming decade, XRG plans to begin operations in the first quarter of 2025.
This includes major global and transformational investments.
One of the notable steps taken by ADNOC in recent times includes the strategic acquisition of German plastics and chemicals giant Covestro.
An immensely significant move, this US$16.3bn investment by ADNOC is among the largest foreign takeovers by a Gulf state, indicative of the region's resolve to diversify beyond oil.
This robust approach extends beyond international acquisitions. ADNOC’s board recently allocated 200 billion dirhams (US$54.45bn) to bolster the local economy as part of a larger in-country value programme.
The scale of ADNOC's new venture certainly matches the global challenges it aims to meet.
As XRG takes shape under ADNOC’s expansive umbrella, it sets a formidable precedent for the energy sector’s journey towards a sustainable and economically inclusive future.
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