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ADNOC Acquires Stake in Global Storage Operator VTTI

Photo courtesy of ADNOC
Photo courtesy of ADNOC
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ADNOC Acquires Stake in Global Storage Operator VTTI

Photo courtesy of ADNOC
Photo courtesy of ADNOC

The Abu Dhabi National Oil Company (ADNOC) has announced a strategic investment in global storage terminal owner and operator VTTI BV (VTTI).

As part of this agreement, ADNOC will acquire a 10 percent equity stake in VTTI.

Following the transaction, VTTI will be owned 10 percent by ADNOC, 45 percent by IFM Global Infrastructure Fund (IFM GIF), an investment vehicle managed by IFM Investors, and 45 percent by Vitol (both directly and through Vitol Investment Partnership II Ltd, an investment vehicle sponsored and managed by Vitol).

VTTI is an independent global owner of 15 hydrocarbon storage terminals across 14 different countries. Its storage network holds around 60 million barrels (9.5 million m3) of combined storage capacity, much of which is in locations that are complementary to ADNOC’s trade flows.

The investment in VTTI provides ADNOC access to storage capabilities across some of its key export markets such as Asia, Africa and Europe while also securing additional facilities at the port of Fujairah, UAE, its main storage hub.

The new agreement also significantly contributes to the development and growth of ADNOC’s global marketing, supply and trading platforms, providing greater access to knowledge and capabilities that will further enable ADNOC’s growth plans.

"We are delighted to be entering into this strategic investment opportunity in VTTI, alongside Vitol and IFM GIF, which will further complement the development of ADNOC’s integrated global trading platform while also delivering a solid financial return,” said UAE Minister of State and ADNOC Group CEO Dr. Sultan Ahmed Al Jaber.

“VTTI’s diverse portfolio of storage assets across key target markets such as Asia, Africa and Europe, provides us with direct access to our customers around the world, a key building block to accelerating ADNOC’s transformation into a more integrated and commercially-minded global energy player,” he was quoted as saying by Emirates News Agency (WAM).

He added: "As one of Fujairah’s largest storage operators, VTTI is a natural partner for ADNOC. This investment further strengthens ADNOC’s strategic position in Fujairah and supports the continued development of Fujairah as a strategic hub for our operations."

By expanding its international storage capabilities and reach, ADNOC will move closer to its customers, allowing it to be more agile and respond quickly to market needs and dynamics, the news agency said.

It will also unlock incremental revenue, margin and cost saving opportunities from the trading, transportation and storage of its products, giving ADNOC better control over where, when and how its products are being supplied to key markets and customers, it added.

"This exciting development is testament to the professionalism and dedication of our VTTI colleagues. Since VTTI was founded 13 years ago, we have worked tirelessly to build a market-leading hydrocarbon storage company, capable of delivering the highest standards of service in key strategic locations,” WAM quoted VTTI’s CEO, Rob Nijst, as saying.

“We are very pleased to have ADNOC as our new shareholder and look forward to benefiting from their regional expertise, working together to further grow our global network of terminals and supporting ADNOC’s trading and supply ambitions,” he added.

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Turkish Central Bank Surprises with Rate Hike to 46% after Market Turmoil

A logo of Türkiye's Central Bank (TCMB) is pictured at the entrance of the bank's headquarters in Ankara, Türkiye April 19, 2015. REUTERS/Umit Bektas/File Photo
A logo of Türkiye's Central Bank (TCMB) is pictured at the entrance of the bank's headquarters in Ankara, Türkiye April 19, 2015. REUTERS/Umit Bektas/File Photo
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Turkish Central Bank Surprises with Rate Hike to 46% after Market Turmoil

A logo of Türkiye's Central Bank (TCMB) is pictured at the entrance of the bank's headquarters in Ankara, Türkiye April 19, 2015. REUTERS/Umit Bektas/File Photo
A logo of Türkiye's Central Bank (TCMB) is pictured at the entrance of the bank's headquarters in Ankara, Türkiye April 19, 2015. REUTERS/Umit Bektas/File Photo

The Turkish central bank hiked its key interest rate by 350 basis points to 46% on Thursday, in a surprise move that reversed an easing cycle and slightly boosted the lira, following market volatility in the wake of last month's arrest of Istanbul's mayor.

The bank also lifted its overnight lending rate again, to 49% from 46%, after having already raised it last month in an unscheduled decision following the arrest.

In addition, the overnight borrowing rate was lifted to 44.5% from 41%, underlining the hawkish reversal in monetary policy.

"Monthly core goods inflation is expected to rise slightly in April due to recent developments in financial markets," the central bank's policy committee said in releasing the decision, Reuters reported

Leading indicators suggest domestic demand is above projections, "suggesting a lower disinflationary impact," it said.

"Inflation expectations and pricing behaviour continue to pose risks to the disinflation process," the bank said, adding it would tighten further "in case a significant and persistent deterioration in inflation is foreseen."

The central bank had begun easing in December, when the rate was 50%, after an aggressive tightening effort since mid-2023 to bring down years of soaring prices and a series of currency crashes.

In a Reuters poll, ten of 13 respondents forecast the bank would maintain its one-week repo rate while three predicted a hike of up to 350 basis points. Most respondents expected the overnight lending rate would be held at 46%.

The lira strengthened slightly right after the decision and traded at 38.10 to the US dollar, while the benchmark stock index BIST 100 and banking index pared back some of its gains during the day.

Last month, the currency briefly hit a record low of 42 and stocks and bonds plunged after the detention of Istanbul Mayor Ekrem Imamoglu, pushing economic authorities to take several measures to ease the market fallout.

Economists expect the roughly 3% weakening of the lira to lift April and May inflation readings. Annual inflation had slowed to 38.1% in March, and was 2.46% month-on-month, lower than forecast.

Imamoglu - President Erdogan's chief rival - is now jailed pending trial in legal moves that sparked the biggest protests in more than a decade and broad criticism of a politicised judiciary and eroding rule of law, claims the government denies.

The lira steadied near 38 to the dollar and Turkish assets recovered somewhat after the central bank sold some $50 billion since Imamoglu's arrest to stabilise the situation, and it bought some 120 billion lira ($3.15 billion) worth of bonds.

The central bank also raised its overnight lending rate by two percentage points to 46% and paused funding through one-week repo auctions, effectively tightening funding conditions by 400 basis points.

On Thursday the bank said it will closely monitor liquidity conditions and added: "In response to the recent developments in financial markets, additional measures to support the monetary transmission mechanism were quickly put in place."

The rate decision came amid global market turmoil caused by what has become an all-out trade war between the United States and China, with both sides ratcheting up their import tariffs.