ADNOC: Historic Moment as World's First Murban Futures Contracts Commence Trading
PR88699
ABU DHABI, United Arab Emirates, March 29, 2021 /PRNewswire=KYODO JBN/ --
- Abu Dhabi's position as a global energy hub reinforced as ICE Murban Futures
launches on new IFAD commodities exchange
- Murban begins trading alongside Brent, WTI and other leading futures
contracts as part of the ICE network
- Nine of the world's largest energy companies and traders join ICE and ADNOC
to launch Murban Futures
The Abu Dhabi National Oil Company (ADNOC) and Intercontinental Exchange (ICE)
have, today, officially celebrated the start of trading of the United Arab
Emirate's (UAE) flagship crude oil, Murban, as a Futures contract on the new
ICE Futures Abu Dhabi (IFAD) commodities exchange.
During a high-profile launch event at Abu Dhabi Global Market (ADGM), attended
by His Highness, Sheikh Mansoor Bin Zayed Al Nahyan, Deputy Prime Minister and
Minister of Presidential Affairs, ICE, ADNOC and the partners in ICE Futures
Abu Dhabi, marked the start of trading for ADNOC’s Murban crude oil on ICE
Futures Abu Dhabi, a significant milestone for Abu Dhabi and the UAE in its
jubilee year.
The introduction of the world's first Murban Futures contract is the latest
step in ADNOC's ongoing transformation into a more market and customer centric
organisation. By making Murban a freely traded crude, similar to Brent or WTI,
customers have better price transparency, flexibility to hedge and manage risks
and increased access to Murban crude. For ADNOC, its flagship crude grade
becomes more available to a broader set of market participants around the
world.
Alongside ICE and ADNOC, nine of the world's largest energy companies and
traders are joining IFAD as founding partners. This includes BP, GS Caltex,
INPEX, ENEOS, PetroChina, PTT, Shell, Total and Vitol. Representatives from the
partner companies joined today's launch event at ADGM, many participating
virtually from around the world.
Commemorating the new Murban Futures contract, His Excellency Dr. Sultan Al
Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Managing
Director and Group CEO, said: "This is a historic moment for ADNOC, Abu Dhabi,
and the UAE as we celebrate the launch of the IFAD exchange with ICE and, with
our partners, capitalize on the growing demand for high-quality Murban crude
oil, particularly from markets in Asia. This achievement is testament to the
vision and foresight of our wise leadership, who have supported this
progressive step that makes Murban crude a freely traded commodity that is more
widely available to buyers and traders around the world."
"The launch of the world's first Murban Futures contract makes our largest
crude grade even more attractive to the global market, enabling ADNOC's
customers and market participants to better price, manage and trade their
purchases of Murban. Murban Crude is recognized the world over for its
intrinsic chemical qualities, consistent and stable production volumes, large
number of international buyers, and numerous long-term concession and
production partners. In making Murban a freely traded global commodity, it
becomes even more attractive to market participants and will deliver greater
value to ADNOC and its partners. This historic and strategic milestone
reinforces the UAE and Abu Dhabi's status as a leading global energy hub and
underscores ADNOC's central role as a catalyst to empower the UAE's economic
ambitions."
Earlier this month, ADNOC announced that its Murban, Upper Zakum, Das and Umm
Lulu crude grades will all be sold destination free, from June, allowing its
crude oils to become a freely-traded commodity.
Discovered in 1958, Murban has played a pivotal role as the bedrock of the
UAE's sustained economic development. With the launch of IFAD and the new
Murban Futures Contract, it enters a new era, further solidifying Abu Dhabi's
position as a global energy hub and a reliable and essential energy provider to
the world.
ICE Murban Futures are physically delivered contracts, with one futures
contract equating to 1,000 barrels of Murban crude oil delivered from the ADNOC
Terminal located in Fujairah, on the East coast of the UAE. Murban is ADNOC's
flagship crude grade, with production capacity of over 2 million barrels per
day at present. It currently accounts for around 50% of the UAE's total
production capacity, with plans in place to increase the production of Murban
to more than 2.5 million barrels per day by 2030, in line with ADNOC's goal of
growing its production capacity to 5 million barrels of crude per day.
"The launch of IFAD represents a singular achievement, one that would not have
been realized without the vision, fortitude and years of work by His Excellency
Dr Sultan, his team at ADNOC, and the leadership of the UAE in opening up
Murban to the markets," said Jeffrey C. Sprecher, Founder, Chairman and CEO of
Intercontinental Exchange. "Today, with our outstanding partners, we are
bringing a new benchmark to life, and just as Murban has powered the UAE for
the past 50 years, with this new futures contract there is a tremendous future
ahead for Murban as a price marker for global energy markets."
H.E. Dr. Al Jaber will, later today, virtually ring the opening bell of the
iconic New York Stock Exchange, another of the international exchanges owned
and operated by ICE, to celebrate the launch of IFAD and the new Murban Futures
contract.
His Excellency Ahmed Ali Al Sayegh, Minister of State (UAE) and Chairman of Abu
Dhabi Global Market, said: "Our sincere congratulations to the Intercontinental
Exchange, Abu Dhabi National Oil Company and the nine global energy companies,
on the successful launch of ICE Futures Abu Dhabi exchange (IFAD). This is the
first derivatives exchange in Abu Dhabi and set up at ADGM. We are proud to be
the preferred jurisdiction of IFAD and home to the world's foremost Murban
Crude Oil Futures contract. The launch of ICE Futures Abu Dhabi further
reinforces Abu Dhabi's status as a global energy hub. We are fully supportive
of and look forward to the continuous achievements and growth of our home-grown
institutions, IFAD and the derivatives community in the UAE and beyond."
Murban Futures will trade globally on the ICE platform, one of the world's
foremost energy exchange networks. All trades clear through ICE Clear Europe,
based in London. From today, Murban now trades alongside ICE Brent and ICE WTI
in the ICE network.
ADNOC moved to forward pricing of its crude oil in March 2020 and previously
priced Murban using Platts Dubai to determine its official selling price (OSP).
The company will move its forward pricing mechanism for Murban to the ICE
Murban Futures Contract from June, coinciding with the first expiry of Murban
Futures.
Earlier this month, the company also confirmed that Upper Zakum, Das and Umm
Lulu grades will be priced at a differential to the announced Murban price.
While the new ICE Murban Futures Contract will be used to identify the price of
Murban two months ahead, ADNOC will announce the price for Upper Zakum, Das and
Umm Lulu crude grades early in the month before the month of loading (known as
M-1).
The market-based, forward pricing mechanism for ADNOC's Murban Crude enhances
the attractiveness of Murban, creating additional transparency and flexibility
for market participants and ADNOC's customers.
As the new home of Murban Futures, Abu Dhabi Global Market has quickly
established its place as a leading commodities trading center, and IFAD joins
two international market-facing trading entities, ADNOC Global Trading and
ADNOC Trading. The Murban Futures contract launches Abu Dhabi's mainstay crude
onto the global energy markets and strengthens the UAE position as an energy
hub and leader.
About ADNOC
ADNOC is a leading diversified energy and petrochemicals group wholly owned by
the Emirate of Abu Dhabi. ADNOC's objective is to maximize the value of the
Emirate's vast hydrocarbon reserves through responsible and sustainable
exploration and production to support the United Arab Emirates' economic growth
and diversification. To find out more, visit: www.adnoc.ae
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SOURCE ADNOC
For media inquiries, please contact: Philip Robinson, Manager, ADNOC External
Relations, +971 (0) 50 504 4934, probinson@adnoc.ae
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