RIYADH: The UAE is likely to see the emergence of a new petrochemicals firm if the ongoing negotiations between the Abu Dhabi National Oil Co. and Austrian energy firm OMV materialize.  

The two firms have announced that they are currently in talks on the possible creation of a new combined petrochemicals holding entity under their respective existing shareholdings in Borouge and Borealis respectively.  

The potential merger falls in line with ADNOC’s ongoing value creation and chemicals growth strategy, according to a statement.  

Listed on the Abu Dhabi Securities Exchange, Borouge is owned 54 percent by ADNOC, 36 percent by Borealis, and 10 percent held by retail and institutional investors.  

On the other hand, Borealis is owned 75 percent by OMW and the remaining 25 percent is owned by ADNOC.  

While ADNOC is undertaking these negotiations as a majority stakeholder in Borouge, OMV is undertaking the negotiations as a major stakeholder in Borealis.  

The final decision regarding the proposed merger is subject to Borouge’s and other relevant parties’ governance processes, the statement revealed.  

In 2019, OMV announced that it was shifting its attention toward the Middle East in an attempt to make the Austrian oil and gas group a major supplier of plastics, after years of largely banking on low-cost Russia for growth.  

At that time, OMV spent more than $4.5 billion — 40 percent of the group’s mergers and acquisitions budget until 2025 — for oil and gas concessions in the region, a 15 percent stake in ADNOC’s refining business, and a to-be-formed trading joint venture with ADNOC and Italy’s Eni.  

“We want to have a fully integrated business model in Abu Dhabi — from the well via the refinery and the petrochemicals all the way to marketing and trade in international markets,” the then CEO of Austria’s second-largest listed company, Rainer Seele, told shareholders. 

Founded in 1971, ADNOC seeks to reduce emissions intensity in the UAE by 25 percent by the year 2030 and achieve climate neutrality by 2050. Its vision is to unlock the full potential of the country’s natural and human resources.