BP PLC cemented its 77-year relationship with Abu Dhabi by swapping about US$2.2 billion of its own shares for a stake in one of the emirate’s largest onshore oil concessions.
The UK’s second-biggest oil group will issue new ordinary shares to pay for 10 percent of the Abu Dhabi Co for Onshore Petroleum Operations Ltd, giving the emirate a 2 percent holding in BP, the London-based company said on Saturday in a statement.
Abu Dhabi investor Mubadala Development Co is likely to hold the BP shares, two people with knowledge of the matter said, asking not to be named before a formal announcement.
Photo: AP
The agreement promises BP additional cash flow and revenue following a downturn that has forced the industry to slash billions of US dollars of investments worldwide in the past two years. The payment in shares also helps BP preserve its own cash and maintain a balance sheet that has seen debt and leverage rise during the oil-price collapse.
“The economics are good for us and for our shareholders, and for BP it brings a strategic partner,” chief executive officer Bob Dudley said in an interview in Abu Dhabi. “This agreement will provide BP with long-term access to significant and competitive resources that we already understand very well.”
The deal would provide an output of 160,000 barrels a day, in addition to the 95,000 barrels BP now produces in Abu Dhabi, Dudley said.
The 40-year concession includes the Bab, Bu Hasa, Shah and Asab fields with total resources of as much as 30 billion barrels of oil equivalent, BP said.
“What the majors bring is how to deploy technologies and also how to manage and organize large scale projects,” said Robin Mills, chief executive officer of Dubai-based oil consultant Qamar Energy.
“It always made sense that Abu Dhabi will look for another partner for the Abu Dhabi onshore fields. More major oil companies could come in,” he said.
France’s Total SA owns a 10 percent stake in the Abu Dhabi onshore concessions, Japan’s Inpex Corp has 5 percent and South Korea’s GS Energy 3 percent, BP said.
The Abu Dhabi National Oil Co is still looking for partners to take the remaining 12 percent of the 40 percent reserved for overseas oil companies.
Abu Dhabi’s 2 percent stake would make it one of BP’s biggest shareholders. Kuwait, which along with the United Arab Emirates (UAE) is a member of OPEC, owns 1.7 percent. The British company said the new shares will be priced at 447 pence a share.
BP has been present in Abu Dhabi since 1939 and held a 9.5 percent stake in the company that operates the onshore fields since the 1970s, according to the statement.
The concession expired in 2014 and Abu Dhabi started negotiating partnerships again in the following year. BP also has stakes in offshore fields and a gas liquefaction company.
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
It was late morning and steam was rising from water tanks atop the colorful, but opaque-windowed, “soapland” sex parlors in a historic Tokyo red-light district. Walking through the narrow streets, camera in hand, was Beniko — a former sex worker who is trying to capture the spirit of the area once known as Yoshiwara through photography. “People often talk about this neighborhood having a ‘bad history,’” said Beniko, who goes by her nickname. “But the truth is that through the years people have lived here, made a life here, sometimes struggled to survive. I want to share that reality.” In its mid-17th to
‘MAKE OR BREAK’: Nvidia shares remain down more than 9 percent, but investors are hoping CEO Jensen Huang’s speech can stave off fears that the sales boom is peaking Shares in Nvidia Corp’s Taiwanese suppliers mostly closed higher yesterday on hopes that the US artificial intelligence (AI) chip designer would showcase next-generation technologies at its annual AI conference slated to open later in the day. The GPU Technology Conference (GTC) in California is to feature developers, engineers, researchers, inventors and information technology professionals, and would focus on AI, computer graphics, data science, machine learning and autonomous machines. The event comes at a make-or-break moment for the firm, as it heads into the next few quarters, with Nvidia CEO Jensen Huang’s (黃仁勳) keynote speech today seen as having the ability to
RSS