Adnoc set to move towards corporate culture with new regime
Abu Dhabi National Oil Company’s chief executive, Sultan Al Jaber, has revamped Adnoc’s leadership and announced a new corporate regime, as a further signal that he intends to move quickly to transform corporate culture at the state oil company.
Changes at the top include Abdulaziz Abdulla Alhajri, who has been named director of Adnoc’s refining and petrochemicals division, moving from chief executive of Borouge, Adnoc’s joint venture petrochemicals company with Austria’s Borealis.
Omar Suwaina Al Suwaidi has been tapped to lead the gas division, moving from his role as deputy director of planning and strategy.
The Adnoc directors are the top executive level under the chief executive and the two new appointments join previously announced director of sales and marketing, Abdulla Salem Al Dhaheri, and director of exploration and production, Abdul Munim Saif Al Kindy.
Adnoc also named new chiefs for six of its 18 operating units, including Adco and Adma-Opco, the joint ventures in charge of the bulk of the emirate’s oil output.
“These new appointments will help enhance our focus on the key pillars of performance, profitability, efficiency and people,” said Mr Al Jaber, referring to the “strategic pillars” he set out soon after being named Adnoc’s chief executive in January.
The newly-appointed executives all come from within Adnoc and the widespread change is aimed at elevating a generation of technocrats who have proved themselves running other companies or projects within the group.
At the same time, Mr Al Jaber has told his top executives that there will be a new corporate regime that will require them to operate as “active asset managers”, which will entail holding the operating company chiefs to account for meeting specific operational and financial targets.
The model will be akin to that used by private sector outfits like GE, or indeed some of the major international oil companies, whereby operating company chiefs are called upon to deliver regular reports on progress against a set of “key performance indicators” to ensure goals are met on a tight schedule.
The new leadership “will play a fundamental role in executing on our strategic imperatives of creating a more profitable upstream business and a more valuable downstream business, ensuring more gas supply, and developing world-class talent”, Mr Al Jaber said, adding that safety and operational integrity of the oil and gasfields will remain key criteria.
The new regime is a departure from Adnoc’s traditional “cash call” approach, where the operating companies ran budgets more like government bureaucracies. At the operating level, Saif Ahmed Al Ghafli is named chief of Adco, the main onshore oil company, which has a target of increasing output from 1.6 million barrels per day at the end of 2014 to 1.8 million bpd by about 2018.
Mr Al Ghafli is considered to have done a good job bringing online last year the huge US$10 billion Shah sour gasfield project in his previous job as chief of Al Hosn, the joint venture with Occidental Petroleum.
Shah ramped up gas production last year to target output of 1 billion standard cubic feet per day, about half of which goes into the gas grid to meet 10 per cent of the UAE’s current demand. It also broke new ground in terms of dealing with a world-record level of hydrogen sulphide, the by-product of which is marketable sulphur.
Yasser Saeed Al Mazrouei is named the new chief of Adma-Opco, which runs a large portion of the offshore oil production, with partners BP, Total and Jodco, which hold a collective 40 per cent of the concession. Together with Zadco, the joint venture with ExxonMobil and Jodco, the overall offshore target is to increase output from 1.4 million bpd to 1.7 million bpd.
While most of the executives being replaced were at or past retirement age, Adnoc executives said the CEO wanted to move quickly to demonstrate to the company’s nearly 50,000 employees that he is serious about implementing a “performance” culture, with promotion driven by results.
“It is a huge cultural shift,” said an Adnoc senior executive, who did not wish to be named. “It’s not like it is going to work overnight, where people say, ‘boom, I’m suddenly thinking that way’. But it should be very clear now that Adnoc’s top executives are going to focus on performance.”
Adnoc executives made it clear that the changes are not a precursor to plans for any privatisation, in the manner that Saudi Arabia’s leaders have put a partial sale of state oil company Aramco on the table.
“That will never happen,” said an insider, although he would not rule out a spinoff of some downstream joint ventures at some point.
But the main objective of the moves is to create a culture at Abu Dhabi’s biggest employer which drives innovation, entrepreneurship and other skills that the country has been looking to foster for decades, with varying success.
The more demanding regime, it is hoped, will create business-minded leaders who can thrive both within Adnoc as well as fostering young talent who can branch off and start new businesses outside the organisation.
Changes at Adnoc:
- Abdulaziz Abdulla Alhajri, director of refining and petrochemicals directorate.
Previously, Mr Alhajri was chief executive of Borouge, the Adnoc petrochemicals joint venture with Borealis, itself an Ipic/OMV joint venture.
- Omar Suwaina Al Suwaidi, director gas management directorate.
Former deputy director of strategy & coordination, and formally in the exploration and development directorate, responsible for Adco operations and developments.
- Abdulla Salem Al Dhaheri, sales and marketing directorate, previously announced.
- Abdul Munim Saif Al Kindy, director of exploration development and production, previously announced.
New CEO appointments:
- Ali Khalifa Al Shamsi, CEO of Yahsat joint venture with China National Petroleum Corp.
Previously director of strategy & coordination for Adnoc.
- Saif Sultan Al Nasseri, CEO Gasco
Previously gas processing director for Adnoc. Mr Al Nasseri has been with Adnoc for almost 20 years, holding a variety of key management roles.
- Saif Ahmed Al Ghafli, CEO of Adco
Previously chief executive, Abu Dhabi Gas Development Company Limited (Al Hosn gas).
- Ahmed Omar Abdulla, CEO of Borouge
Formerly chief operating officer of Abu Dhabi Oil Refining Company (Takreer).
- Mansour Mohamed Al Mehairbi, CEO of Al Hosn Gas
Previously senior vice president for projects at Al Hosn Gas.
- Yasser Saeed Al Mazrouei, CEO of Adma-Opco
Formerly deputy director of E&P within the exploration and production directorate Adnoc.