Adnoc and Sawiris' OCI complete creation of $1.7bn-turnover fertiliser joint venture

New entity, known as Fertiglobe, will combine Adnoc's fertilisers business with OCI's Middle East nitrogen fertiliser business

At work in the Panorama Digital Command Centre. Bloomberg

Abu Dhabi National Oil Company and Dutch firm OCI closed a deal to form a major export-focused nitrogen fertiliser business, which is expected to have over $1.7 billion in annual revenues.

Fertiglobe, the entity formed after the merger of Adnoc's fertiliser arm and OCI's Middle East nitrogen fertiliser business, will be headquartered at the Abu Dhabi Global Market.

Adnoc will hold a 42 per cent stake in the combined entity, with OCI, which is listed on the Euronext exchange with Egyptian billionaire Nassef Sawiris as its main shareholder. OCI will fully consolidate the combined business.

"The efficiency we have shown in completing this milestone transaction so quickly is a strong indication of the way that Fertiglobe will operate in the future and a hallmark of what we hope to achieve by combining Adnoc's fertiliser platform and OCI’s Mena-based fertiliser assets," said Adnoc group chief executive and UAE minister of state Dr Sultan Al Jaber.

The move comes amid a pivot to build a stronger product portfolio among Middle East national oil companies. Adnoc announced last year it would invest Dh165bn alongside partners in downstream, which refers to the refining and chemicals segments of the energy value chain. The company has also been undergoing a transformation since Dr Al Jaber became chief executive in early 2016, which has allowed Adnoc to pursue more revenue-generating deals and opportunities.

Fertiglobe will have a production capacity of 5 million tonnes of urea and 1.5 million tonnes of sellable ammonia, making it the largest export-focused platform for nitrogen fertilisers and one of the largest producers in the Mena region.

Fertiglobe, which has a strong storage and distribution network, will have access to ports on the Mediterranean, the Red Sea and the Gulf.

"This platform has a solid financial profile and has significant potential for future growth and value creation, with the support and under the guidance of its two key shareholders," said Mr Sawiris.

Adnoc Fertiliser entities EBIC, EFC, Sorfet and Fertil will come under the ownership of Fertiglobe, following the completion of the transaction.