UK major BP and state-owned Abu Dhabi National Oil Company (ADNOC) in the United Arab Emirates plan to form a joint venture in Egypt that will initially focus on natural gas and will incorporate Egyptian concession stakes held by BP.
The joint venture is expected to be formed in the second half of 2024 and will be 51 percent owned by BP and 49 percent by ADNOC.
The BP-ADNOC Egyptian joint venture was originally planned to be the second phase of cooperation between the two companies in the Eastern Mediterranean gas and LNG province after the planned acquisition of a 50 percent stake in Israeli gas producer NewMed Energy.
Negotiations on the proposed NewMed agreement for BP and ADNOC started in March 2023, though have been stalled since the start of Israel’s war against Hamas terrorists started in October.
Egyptian interests
“As part of the agreement, BP will contribute its interests in three development concessions, as well as exploration agreements in Egypt to the new joint venture,” said a statement.
“ADNOC will make a proportionate cash contribution which can be used for future growth opportunities,” they added.
This is the first major natural gas deal for BP under new Chief Executive Murray Auchincloss.
“The announcement with BP represents a significant step forward as ADNOC builds its international natural gas portfolio,” said Musabbeh Al Kaabi, ADNOC executive director for low carbon solutions and international growth.
“This progressive joint venture partnership will enhance Egyptian energy security and the economic potential of the region’s most populous Arab country,” Al-Kaabi explained.
Strategic partners
“Building on our long-standing strategic partnership with BP, ADNOC looks forward to continue exploring other opportunities,” he added.
William Lin, BP’s executive vice president of regions, corporates and solutions, said that the “dynamic joint venture” offered a platform for international growth.
“Together, we will build on the 60 years of safe and efficient operations of BP and its partners in Egypt,” Lin stated.
The natural gas concession to be included in the joint venture include BP’s 10 percent in the Shorouk block containing Egypt’s huge Zohr gas field.
BP’s 100-percent owned North Damietta interests are also included along with BP’s 50-percent stake in the North El Burg concession with the undeveloped Satis field.
Three other exploration concession included are North El Tabya, Bellatrix-Seti East and the North El Fayrouz block.
