Latest news with #Sultanal-Jaber
CNBC
4 days ago
- Business
- CNBC
BP takeover speculation heats up as UAE oil giant ADNOC enters the fray for gas assets
UAE oil giant ADNOC has joined the fray of firms said to be circling some of BP's highly prized assets, as takeover speculation for the embattled energy major kicks into overdrive. Abu Dhabi National Oil Company is thought to be weighing up a move for some of the London-listed firm's assets, should the oil major break up or seek to divest more units, Bloomberg reported Wednesday, citing unnamed sources familiar with the matter. ADNOC is reportedly most interested in BP's liquefied natural gas (LNG) assets, although it is also said to have considered a full takeover of the company. It is understood by Bloomberg that any prospective deal would likely take place via ADNOC's international unit, XRG. Spokespeople at BP, ADNOC and XRG declined to comment on the speculation when contacted by CNBC. A protracted period of underperformance relative to its industry peers has thrust BP into the spotlight as a prime takeover candidate. British rival Shell, as well as U.S. oil giants Exxon Mobil and Chevron, are among some of the names that have been touted as possible suitors. Any potential deal between ADNOC and BP is seen as far from a foregone conclusion, but analysts point out that the two companies share a long-standing relationship across hydrocarbons and renewables over a range of geographies, most notably in Abu Dhabi and most recently in Egypt. Former BP CEO Bernard Looney, who left the company after less than four years in the job in September 2023, sits on the XRG board alongside ADNOC CEO Sultan al-Jaber. Maurizio Carulli, global energy and materials analyst at Quilter Cheviot, said ADNOC's purported interest in some of BP's assets is a "significant" development — albeit one that is somewhat expected, given ADNOC is a growing, cash-rich business looking to expand further into gas. "That said, it seems unlikely that Adnoc would consider a full bid for BP as a whole given the company would not be strategically interested in BP's oil assets. A few other listed oil majors might, though," Carulli told CNBC by email. "BP's discrete assets, both upstream and downstream, will no doubt capture large interest from a number of both energy and private equity players," he added. Last month, BP reportedly attracted interest from a number of possible buyers for its Castrol lubricants business, a unit thought to be one of the "crown jewels" of its portfolio. Energy companies including India's Reliance Industries and Saudi Arabia's oil behemoth Aramco, as well as private equity firms Apollo Global Management and Lone Star Funds, were all previously touted as suitors for BP's Castrol unit, Bloomberg reported on May 28, citing people familiar with the matter. CNBC has contacted the companies said to be considering BP's Castrol unit. BP is seeking to fend off a prospective takeover by restoring investor confidence. The company launched a fundamental strategic reset earlier in the year and, despite posting weaker-than-expected first-quarter profit, CEO Murray Auchincloss told CNBC in late April that the firm was "off to a great start" in delivering on its new direction. Shares of BP have stabilized in recent weeks, following a sharp fall in early April, as trade war volatility rocked financial markets. The stock price is down more than 4% in the year to date. Allen Good, director of equity research at Morningstar, said it is unlikely BP will be prepared to split with significant pieces of its upstream portfolio, given the firm's recent green strategy U-turn to double down on hydrocarbons. As part of BP's strategic reset, the company announced plans to increase annual oil and gas spending to investment to $10 billion through 2027, while slashing spending on renewables. It is also targeting $20 billion in divestments over the coming years. "Activist pressure has been more on further cost and capital reductions, not necessarily core divestitures. Breaking up the company is unlikely to be the solution shareholders are looking for," Allen told CNBC by email. For XRG, which ADNOC launched last year, reports of interest in some of BP's assets come as the investment company seeks deals on gas and chemicals assets to help it reach an enterprise value of $80 billion. "We are committed to delivering long-term value for our stakeholders and reinforcing Abu Dhabi and the UAE's role as a global energy and chemicals leader," ADNOC's al-Jaber said at the time. Russ Mould, investment director at AJ Bell, said any potential transactions between ADNOC and BP were likely to be hard-driven, with each party striving to defend its own interests. "BP is under pressure to deliver on its goal to reduce debt, through improved organic cash flow and asset disposals," Mould told CNBC. "ADNOC will be well aware of this, and how the clock may be ticking so far as BP management is concerned, and it will therefore look to drive a hard bargain in the process, should it indeed be interested in some of BP's assets, as reports suggest," he added.
Arabian Post
16-05-2025
- Business
- Arabian Post
U.S. Commits $60 Billion to UAE Energy Projects Amid Expanding Bilateral Ties
The United States has pledged a $60 billion investment in the United Arab Emirates' energy sector, as part of a broader $440 billion joint initiative extending through 2035. This commitment was announced during President Donald Trump's visit to the Gulf, underscoring a significant deepening of economic relations between the two nations. Sultan al-Jaber, chief executive of the Abu Dhabi National Oil Company , detailed the investment plan, highlighting the collaborative efforts to advance energy infrastructure and innovation. The U.S. contribution focuses on enhancing the UAE's energy capabilities, aligning with both countries' strategic interests in energy security and technological advancement. This energy investment is a component of over $200 billion in deals unveiled during President Trump's visit. Notably, Etihad Airways announced a $14.5 billion agreement to purchase 28 Boeing aircraft, including Boeing 787 and next-generation 777X models, equipped with GE engines. Deliveries are scheduled to commence in 2028, supporting U.S. manufacturing and exports while facilitating Etihad's fleet expansion plans. In a significant move to bolster bilateral economic ties, the UAE has committed to a 10-year, $1.4 trillion investment framework in the United States. This framework aims to substantially increase the UAE's existing investments in the U.S. economy, focusing on sectors such as artificial intelligence infrastructure, semiconductors, energy, and manufacturing. The initiative reflects the UAE's strategic focus on innovation and future-oriented industries, as well as its intent to strengthen economic ties with the U.S. A key project under this framework is the development of one of the world's largest AI data center complexes in Abu Dhabi. This initiative, led by Emirati AI firm G42, will span 10 square miles and initially operate with 1GW of data center power, eventually expanding to 5GW. The project aligns with the UAE's ambition to diversify its oil-based economy and position itself as a global AI powerhouse. The partnership also includes plans to build or fund equivalent data centers in the U.S., bolstering strategic and technological ties between the countries. The UAE's investment in the U.S. AI sector is expected to channel hydrocarbon revenues into sectors with higher long-term yields, supporting America's infrastructure development without taxpayer burdens. The UAE's investment strategy encompasses securing critical minerals essential for AI hardware and renewable energy systems. A $1.2 billion mining partnership with Orion Resource Partners targets lithium, cobalt, and rare earth metals, reducing supply chain vulnerabilities and supporting U.S. reindustrialization efforts. Emirates Global Aluminum plans to build the first new aluminum smelter in the U.S. in 35 years, aiming to nearly double the country's domestic production. This facility will bolster domestic production for the aerospace and electric vehicle sectors, addressing strategic weaknesses exposed during pandemic-era shortages. The UAE's investments also extend to the energy sector, with ADNOC's XRG division set to invest in U.S. natural gas exports via Texas' NextDecade LNG facility. This move aligns with the UAE's energy transition goals while capitalizing on America's shale boom.
