Abu Dhabi oil giant ADNOC, Austrian OMV create $60B chemicals giant

Abu Dhabi National Oil Co. (ADNOC) and Austrian energy and chemicals producer OMV are merging some petrochemicals and plastics units to form Borouge Group, a company valued at more than $60 billion.

Borouge will be headquartered in Austria, with a regional base in the UAE and offices in Canada and Singapore. The company will acquire Canada’s Nova Chemicals — currently owned by Abu Dhabi sovereign wealth fund Mubadala — positioning it as the world’s fourth-largest producer of polyolefins, plastics used in everything from packaging and toys to car bumpers and medical devices. ADNOC plans to transfer its stake in Borouge to XRG, its lower-carbon energy and chemicals, and global gas investment platform.

Gulf oil producers have long expanded into petrochemicals to boost returns from crude production and meet rising demand in a market projected to double by 2050 — a strategy that contrasts with international oil companies’ apparent shift away from refined products. BP last month launched a “strategic review” of its global lubricants business, while Shell is considering selling its chemicals assets in the US and Europe, according to The Wall Street Journal.