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Global and responsible investing Petroleum & Petrochemicals

2017 was an important year for the Petroleum and Petrochemicals businesses; highlights included the expansion of the refining and petrochemicals businesses in North America. While on the other side of the world, Mubadala Petroleum continues to make significant contributions to the local communities where it operates.

US Gulf Coast Expansion

NOVA Chemicals’ investment in the US Gulf Coast

NOVA Chemicals is one of North America’s foremost petrochemical companies, committed to delivering game changing technology in the production of plastic resins and chemicals including ethylene, polyethylene, chemical co- products and expandable styrenic polymers.

NOVA Chemicals produces high-quality polyethylene resins that provide high-performance, sustainable, cost-effective solutions for markets and applications such as food packaging, caps and closure bags, liners, stretch film and more.

NOVA Chemicals has more than 13 manufacturing facilities in the United States and Canada. The company has its headquarters in Calgary, Canada with an international workforce of more than 2,900 employees.

Over the last 18 months, Mubadala has supported NOVA Chemicals’ strategy to help meet the growing global consumer demand for polyethylene, predominantly through its investments in the US Gulf Coast, the largest refining and petrochemicals production hub in North America.

In July 2017, NOVA Chemicals completed the acquisition of its interests in an olefins facility based in Geismar, Louisiana, as well as the Ethylene Trading Hub in Mt. Belvieu, Texas, the latter which is the primary transaction point for the purchase and sale of ethylene in the United States. As part of the acquisition, NOVA Chemicals acquired approximately 525 acres of undeveloped land adjacent to the olefins facility.

The acquired businesses enjoy positive cash flows and have significant opportunities for future growth, in turn supporting strong financial returns for Mubadala.

The total value of the acquisition was approximately AED 7.7 billion (US $2.1 billion).

Total joint venture in partnership with Borealis

In March 2017, NOVA Chemicals and Borealis announced a preliminary agreement to form a joint venture (JV) with Total. Definitive agreements will be finalized in Q1 2018 and the JV will commence subject to customary closing conditions, including receipt of regulatory approvals.

The JV will encompass Total’s existing Bayport, Texas polyethylene facility, a new Borstar® technology polyethylene unit at Total’s Bayport site, and the ethane steam cracker that is under-construction at Total’s site in Port Arthur, Texas. Approximately 1,500 jobs will be created during peak engineering and construction activity, and both new plants are expected to be up and running before 2021.

The JV will be between Total and Novealis Holdings LLC, a joint venture between Borealis and NOVA Chemicals.  – It will leverage the low-cost feedstock position of the US Gulf Coast to support growing demand in both the North American domestic and global polyethylene markets.

As the sole shareholder of NOVA Chemicals, a shareholder in Borealis, and a partner with Total elsewhere, Mubadala played a significant role in the preliminary discussions and evaluations leading up to the conclusion of the agreement.

Investing in local communities

Mubadala Petroleum: Investing in communities

Mubadala Petroleum is an international, upstream oil and gas exploration and production company, wholly owned by Mubadala. It manages assets and operations across eight countries with a primary focus on the Middle East and Southeast Asia.

Core to Mubadala Petroleum’s business is being a responsible corporate citizen and operator, committed to taking an organized and consistent approach in contributing to the countries in which it operates.

Guided by community needs, the company’s Corporate Social Responsibility (CSR) programs and projects focus on a broad set of initiatives, including environmental improvements, education and training, and economic diversification through capability building and skills enhancement.

Beyond the temporary employment opportunities created during the construction and permanent jobs in the future operation of its facilities, GAC looks to deliver broader economic benefits by prioritizing locally sourced goods and services. 

In Thailand, Mubadala Petroleum has had a presence since 2004.  It operates three offshore producing fields - Jasmine, Manora and Nong Yao -  whose combined production makes the company the second largest crude oil operator in the Gulf of Thailand.

Mubadala Petroleum has a well-established and comprehensive community investment program in Thailand, and collaborates with local stakeholders to support mainly the coastal communities closest to its concessions. To date, for example, more than 30,000 students, teachers and community members in Songkhla and Prachuap Kirikhan have benefitted from Mubadala Petroleum’s partnership with the Education Development Foundation of Thailand.

Operating in Indonesia in another initiative, since 2011, Mubadala Petroleum controls two Production Sharing Contracts (PSCs): Sebuku containing the producing Ruby gas field and West Sebuku.  The company has nurtured a well-established community investment program in partnership with local stakeholders to support the communities of East Kalimantan, South Kalimantan, and West Sulawesi, closest to Ruby.

More than 2,500 scholarships have been provided to encourage students stay in school or pursue higher education. Additionally, 500 elementary students have also benefitted from school facility improvement projects and a reading day program in Indonesia.

Mubadala Petroleum has also facilitated more than 25+ workshops supporting career development, skills training and primary healthcare education in local Indonesian communities. Since 2014, more than 15 fish aggregating devices have been deployed in the waters around Majene, West Sulawesi supporting fisherman in increasing their income.

Across its portfolio, Mubadala Petroleum is committed to playing a responsible role in contributing to the sustainable development of these communities.