A United Arab Emirates state-owned oil giant made a positive stock market debut Wednesday, a listing likely to resonate through the Middle East as several other companies prepare to go public.
The Abu Dhabi National Oil Company (ADNOC) listed a stake in its fuel distribution unit, called ADNOC Distribution. John Carey, the deputy CEO of ADNOC Distribution, told CNBC that though the initial public offering (IPO) of this unit was "a long time coming," he was "really excited" about the company's prospects.
When asked how important it would be for the group's public listing to do well given the interest among other companies in the region looking to follow suit, Carey replied: "Investors looked at the United Arab Emirates ... and for us, we need to lead the way, we need to build that credibility and I believe our plans do that."
Carey also told reporters the group would look to expand its fuel stations into Dubai and Saudi Arabia next year. "ADNOC Distribution relies on its customers and we are going to grow with them," he said.
Shares rise sharply at open
ADNOC announced it would sell the 10 percent stake in its distribution unit in November and has raised $851 million, according to Reuters. The company had initially planned to sell as much as a 20 percent stake, however, and had lowered the top end of its offer price.
On Wednesday, shares of ADNOC Distribution rose sharply at the open, trading at 2.9 dirhams (0.79 cents) shortly after the bell versus an IPO price of 2.50 dirhams per share.
ADNOC's fuel-distribution IPO is set to become the first of many in the Middle East as companies based in Abu Dhabi and other Gulf states are privatizing energy assets in order to compete in an era of cheap crude. Wednesday's price surge won't go unnoticed among investors eagerly awaiting the listing of state-owned oil giant Saudi Aramco in 2018. Saudi Crown Prince Mohammed bin Salman said last year that Aramco is worth at least $2 trillion.
ADNOC has been in the midst of a major restructuring since Sultan Ahmed Al Jaber was appointed as the company's chief executive in 2016. The oil industry has been forced to cut costs and search for ways to boost efficiency since the price of oil collapsed from nearly $120 a barrel in June 2014. The sharp drop in prices was caused by weak demand, a strong dollar and booming U.S. shale production.
ADNOC produces around 3 million barrels of oil per day, accounting for approximately 3 percent of global production. The UAE-based firm also produces almost 10 billion cubic feet of raw gas per day, meaning it is one of the leading energy producers in the world.
—CNBC's Holly Ellyatt and Reuters contributed to this report.