Investing
BP, ADNOC’s XRG agree Egypt gas JV Arcius Energy
Global Banking & Finance Review®
Company
By Yousef Saba
DUBAI (Reuters) – BP and Abu Dhabi National Oil Company’s international investments arm XRG said on Monday they have closed a deal for a new natural gas joint venture in Egypt, as ADNOC expands its efforts to grow abroad.
The joint venture, Arcius Energy, is 51% owned by BP and 49% owned by XRG. It will operate in Egypt initially.
Naser Saif Al Yafei, an ADNOC veteran, was hired as Arcius’ chief executive. He most recently led strategy, sustainability and transformation at subsidiary ADNOC Gas. Katerina Papalexandri, vice president of gas and low carbon energy growth at BP, was appointed chief financial officer.
“Arcius Energy brings together the strengths of our two companies to create a dynamic new platform for international growth in natural gas in the region,” BP Chief Executive Murray Auchincloss said in the statement, adding that Egypt was “a hub for new opportunities to build out a highly competitive gas portfolio in the region.”
Sultan Al Jaber, XRG executive chairman and ADNOC CEO, said the JV “fully aligns with XRG’s objectives to accelerate the transformation of energy systems and build a world-scale integrated gas and chemicals portfolio to meet rising global demand.”
Arcius’ concessions in Egypt comprise a 10% interest in Shorouk, which contains the giant Zohr field operated by Eni and 100% of North Damietta, which contains the producing Atoll field operated by the Pharaonic Petroleum Company.
It also has exploration concession agreements for North El Tabya, Bellatrix-Seti East and North El Fayrouz.
ADNOC announced last week that the newly-created XRG’s board members include Blackstone’s Jon Gray and former BP boss Bernard Looney, who was dismissed by BP’s board last December after the oil major said he had knowingly misled the board by failing to disclose past relationships.
The appointment of big names from the world of finance and energy to XRG’s board signals its grand ambitions, as ADNOC pursues its aggressive growth strategy.
XRG, which ADNOC said is valued at more than $80 billion, will focus on overseas investments in low-carbon energy, including gas, chemicals and renewables.
(Reporting by Yousef Saba, Editing by Louise Heavens)
A joint venture is a business arrangement where two or more parties agree to pool their resources for a specific project or business activity, sharing profits, losses, and control.
Natural gas is a fossil fuel composed mainly of methane, used as an energy source for heating, electricity generation, and as a fuel for vehicles.
Sustainability in business refers to operating in a way that meets present needs without compromising the ability of future generations to meet their own needs, often focusing on environmental and social impacts.
An energy portfolio is a collection of energy assets and investments that a company holds, aimed at diversifying energy sources and optimizing returns.
An investment is the allocation of resources, usually money, in order to generate income or profit, often involving a degree of risk.
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