ADNOC to launch futures exchange for its Murban crude

Intercontinental Exchange, Inc., a leading operator of global exchanges and clearing houses and provider of data and listings services. Abu Dhabi National Oil Company (ADNOC) announced on last Wedneday a significant investment. Agreement will focus on the sale of refined products from ADNOC to Rongsheng, downstream investment opportunities. It will launch a new exchange, ICE Futures Abu Dhabi (IFAD), to host the world’s first futures contracts. Intercontinental Exchange says new exchange will host futures contracts based on ADNOC Murban crude oil next year. Sources say platform will be based in Abu Dhabi’s financial district and operated by Intercontinental Exchange Inc.

It based on Abu Dhabi National Oil Company’s (ADNOC) Murban crude oil. Abu Dhabi’s Supreme Petroleum Council announces significant increase in oil and gas reserves plus new discoveries. Abu Dhabi will begin trading futures contracts of its flagship oil grade in what could eventually become a new price benchmark. On November 4, 2019, Abu Dhabi’s Supreme Petroleum Council (SPC) announced that it would implement a new pricing mechanism. Adnoc has signed a ‘comprehensive strategic framework’ agreement with Russia’s Gazprom Neft. As a result, Murban pricing will move from a retroactive official selling price to market-driven. Adnoc has signed an agreement with Netherland-based chemical firm.

Jeffrey C. Sprecher, chairman and CEO says “ICE was founded with a vision to create an open, transparent electronic marketplace for energy trading”.

The SPC also authorized ADNOC to remove destination restrictions on Murban crude sales. Intercontinental Exchange, an operator of global exchanges and clearing houses and provider of data and listings services. Abu Dhabi’s Supreme Petroleum Council on last Monday announced a significant increase in oil and gas. The Murban futures contract referenced by the SPC will be hosted on ICE Futures Abu Dhabi. Trading in Murban crude futures aims at “strengthening Abu Dhabi’s position as a global energy player. Established in Abu Dhabi Global Market (ADGM), an International Financial Centre that practices. The SPC reported an increase in hydrocarbon reserves of 7 billion stock tank barrels.

The emirate also reported significant increases in its oil and gas reserves. The common law in its entirety to its legal and regulatory regime, IFAD has been granted recognition by the Financial Services. The Murban futures contract would set prices for physical sales of the grade. It regulatory Authority as a Recognised Investment Exchange. Contracts traded at IFAD will, subject to regulatory approval, be cleared at ICE Clear Europe, one of the world’s leading clearing houses. The scope of the Bab field upgrade project includes the development of oil producing wells. It continue to successfully deliver our 2030 smart growth strategy. It will clear alongside ICE Brent, ICE WTI, ICE (Platts) Dubai and ICE Low Sulphur Gasoil allowing customers to benefit.

The associated margin offsets and delivering meaningful capital efficiencies. ICE was founded with a vision to create an open, transparent electronic marketplace for energy trading. Abu Dhabi won’t be the first regional producer to offer futures contracts for its crude. IFAD and ICE Clear Europe are working to receive regulatory approval from key jurisdictions. The UAE pumps about three million barrels of oil per day (bpd) and produces some 10.5 billion cubic feet. Adnoc has set the price for its four crude grades retroactively. It subject to receiving these, expect to launch in the first half of 2020. It also further demonstrates how ADNOC is leveraging world-class partnerships to create, unlock.

It committed to working with partners who enable us to unlock and maximize value. Murban futures will sit alongside the most significant global oil benchmarks. The efficiency have shown in completing this milestone transaction so quickly. It providing the opportunity for the first time for a much larger group of participants to trade. Oman and the neighbouring UAE emirate of Dubai joined with CME Group Inc in 2007 to start the Dubai Mercantile Exchange. Sheikh Mohamed commended ADNOC on its strong performance as it delivers its 2030 strategy. Hedge Murban in a regulated, transparent and accessible venue. Oman, Dubai and Saudi Arabia are the only producers in the Gulf to price off the contract.

The recent decision by the SPC and the launch of a new exchange in Abu Dhabi by ICE marks a historic change. With more than AED1.35 billion ($367 million) expected to flow back into the UAE’s economy. Rongsheng is one of the leading companies in China’s petrochemical and textile industry. “For the first time, Murban will be priced on a forward looking, market driven basis based off the ICE Murban future. ICE was founded with a vision to create an open, transparent electronic marketplace for energy trading. The launch of ICE Futures Abu Dhabi further reinforces Abu Dhabi’s status as a global energy hub. Oman, Dubai and Saudi Arabia are the only producers in the Gulf to price off the contract.

The SPC also gave its approval to list ADNOC’s Murban crude oil on an internationally recognised exchange. Most Middle Eastern producers price their crude based on the Oman and Dubai benchmarks. It creates a platform for cooperation in research and development as well as upstream and downstream sectors. It supports ADNOC’s continued transformation into a more modern and progressive energy company. China is the world’s second-largest oil consumer, and Chinese energy companies have steadily increased their participation. The award will give significant stimulus to the country’s products. It most of the others base their monthly crude pricing on the Dubai and Oman crude price assessments.

Ahmed Ali Al Sayegh says “ADGM is pleased to be the preferred international jurisdiction that supports Intercontinental Exchange”.

This development marks momentous progress within the energy industry. UAE’s position as an energy provider, particularly to fast-growing Asian markets. The Murban futures contract would set prices for physical sales of the grade. It adds new vibrancy to the capital markets of the UAE and wider Middle East region. Adnoc has set the price for its four crude grades retroactively. Company welcome IFAD as an important international exchange to the ADGM family. Company have laid careful groundwork to extract and promote synergies throughout strategically placed. Every confidence that our expertise and resources, pooled together, will contribute.

It adds to diverse global community. ADNOC has identified China as an important growth market for its crude oil. ICE Murban Futures will be a physically delivered contract with delivery at Fujairah in the United Arab Emirates (UAE). ICE Murban Futures will be a physically delivered contract with delivery at Fujairah on a free on board basis. The company produces Murban from onshore fields, unlike its other grades – Umm Lulu, Das. The expansion of the Bab field comes two years after ADNOC Onshore awarded a contract. Murban Crude is a light sweet crude produced by ADNOC. Adnoc may try to set up a trading platform for the new contract in Abu Dhabi with Intercontinental Exchange Inc. ADNOC produces around 3 MMbpd of crude, of which some 1.7 MMbpd is Murban crude.

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