Illustration; Source: BP

BP and ADNOC build on more than 50 years of collaboration with new gas-focused joint venture

UK-headquartered energy giant BP and the UAE’s oil and gas heavyweight Abu Dhabi National Oil Company (ADNOC) have decided to take their long-standing partnership to a new level by establishing a new joint venture (JV), which will initially focus on the development of gas assets in Egypt.

Illustration; Source: BP

This JV, comprising BP 51% and ADNOC 49%, will combine the pair’s technical capabilities to grow its gas portfolio. The UK player will contribute its interests in three development concessions and exploration agreements in Egypt to the new JV while the UAE giant will make a proportionate cash contribution which can be used for future growth opportunities. The formation of the incorporated JV, which is subject to regulatory approvals and clearances, is expected to be completed during 2H 2024.

William Lin, BP’s Executive Vice President of Regions, Corporates & Solutions, remarked: “This dynamic JV offers a platform for international growth that advances our longstanding and strategic partnership with ADNOC that spans over five decades. Together, we will build on the 60 years of safe and efficient operations of BP and its partners in Egypt, and continue to produce and deliver secure, lower-carbon energy in the form of natural gas to the country.”

The concessions, which will be included in the JV, encompass Shorouk, where BP holds a 10% interest and which contains the producing Zohr field operated by Belayim Petroleum (Petrobel); North Damietta, which is owned by BP and contains the producing Atoll field operated by Pharaonic Petroleum Company (PhPC); North El Burg, in which BP has a 50% interest and where the undeveloped Satis field, operated by PhPC, is located; and North El Tabya, Bellatrix-Seti East, and North El Fayrouz exploration concession agreements. 

Musabbeh Al Kaabi, ADNOC’s Executive Director for Low-Carbon Solutions and International Growth, commented: “Today’s announcement with BP represents a significant step forward as ADNOC builds its international natural gas portfolio. This progressive joint venture partnership will enhance Egyptian energy security and the economic potential of the region’s most populous Arab country.

“Building on our long-standing strategic partnership with BP, ADNOC looks forward to continue exploring other opportunities as we collectively seek to decarbonize our operations and lead a just and equitable energy transition.”

While strengthening the five decades-long relationship between the two oil and gas industry heavyweights, the JV also further bolsters the broader strategic partnership across energy, renewables, and carbon capture and storage technology, in addition to the duo’s collaboration at ADNOC’s onshore concession in Abu Dhabi.

The two companies are founding members of the Oil and Gas Decarbonization Charter (OGDC), which was launched during COP28 in Dubai to speed up climate action across the energy industry. Currently, BP with its partners produces around 70% of Egypt’s gas through its gas development projects in the West and East Nile Delta.

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This JV comes after ADNOC made its first international equity investment foray in carbon management by becoming a lead investor in Storegga, a UK-based company focused on the development of global carbon capture and storage (CCS) projects.

ADNOC also joined forces with Santos in November 2023 to pursue a pathway towards the potential development of a joint global carbon management platform in a bid to support the decarbonization journey throughout Asia-Pacific and accelerate net zero goals.

BP is also actively working on building up its hydrocarbon portfolio alongside its decarbonization and green transition plans. Recently, the UK giant welcomed the arrival of an FLNG unit destined for its Greater Tortue Ahmeyim (GTA) gas project off the coasts of Mauritania and Senegal.