Adnoc and BP have agreed to form a joint venture in Egypt that will focus on the development of gas assets.
As part of the deal, BP will transfer its interests in three development concessions and exploration agreements in Egypt to the joint venture.
Adnoc, meanwhile, will make a proportionate cash contribution, which can be used for future growth opportunities, the companies said on Wednesday.
The agreement with BP “represents a significant step forward as Adnoc builds its international natural gas portfolio”, said Musabbeh Al Kaabi, Adnoc's executive director for low carbon solutions and international growth.
The partnership will “enhance Egyptian energy security and the economic potential of the region’s most populous Arab country”, he said.
The assets include BP’s 10 per cent stake in the Shorouk concession that contains the giant Zohr gasfield, and the North Damietta offshore block in Egypt's Nile Delta.
BP will also transfer a 50 per cent interest in the North El Burg offshore concession to the new joint venture. Four gas discoveries have been made on the block since 2008, with Satis being the largest discovery, accounting for more than half of all reserves.
“This dynamic JV [joint venture] offers a platform for international growth that advances our long-standing and strategic partnership with Adnoc,” said William Lin, BP’s executive vice president of regions, corporates and solutions.
The formation of the joint venture is expected to be completed during the second half of 2024, depending on regulatory approvals.
Egypt, which is facing an increase in gas demand from its population of more than 100 million, aims to be a regional energy supplier.
This involves selling its own gas and exporting liquefied natural gas (LNG) sourced from Israel to countries in the Middle East, Africa and Europe.
The discovery of the Zohr field in 2015 was a turning point for the country's oil and gas sector.
The find has attracted substantial foreign investment from Italy’s Eni, while encouraging other international oil companies (IOCs) such as Chevron, Shell and BP, to bid for blocks offered in Egypt’s onshore and offshore concessions.
The four IOCs combined are investing about $22 billion between 2015 and 2030 in Egypt, which accounts for more than 70 per cent of their total investments across North Africa in the period, according to Rystad Energy.
In 2023, BP said it would invest $3.5 billion in Egypt along with its partners over the next three years. A portion of the company's investment will go towards renewable energy projects, including green hydrogen.
The oil and gas industry in the country is experiencing falling production from older oilfields because water is seeping into the reservoirs, mainly the result of challenges in managing the complex geological structures, Rystad said.
Investment in natural gas, seen as a low-carbon alternative to crude oil and coal, has surged in recent years as consumers and industries look to reduce their carbon emissions.
Europe emerged as a major importer of liquefied natural gas in 2022 after Russia slashed exports to the region follow its invasion of Ukraine.
Global gas demand this year is forecast to grow by 2.5 per cent, or 100 billion cubic metres, according to the International Energy Agency.
Expected colder winter weather in 2024, compared to the unusually mild temperatures in 2023, is likely to bring increasing demand for space heating in residential and commercial sectors, the agency said in a report last month.
Adnoc is unlocking untapped unconventional reservoirs as part of its integrated gas strategy, with the aim of making the UAE “gas self-sufficient” by 2030.
Last year, the company raised about Dh9.1 billion ($2.5 billion) from the sale of a 5 per cent stake in its gas business in one of the largest initial public offerings of 2023.
Adnoc continues to own 90 per cent of Adnoc Gas, which has access to 95 per cent of the UAE's natural gas reserves, the seventh largest globally.
The Adnoc subsidiary signed new LNG supply agreements valued between $9 billion and $12 billion in 2023.
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The specs
Engine: 5.0-litre V8
Power: 480hp at 7,250rpm
Torque: 566Nm at 4,600rpm
Transmission: 10-speed auto
Fuel consumption: L/100km
Price: Dh306,495
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Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
How Alia's experiment will help humans get to Mars
Alia’s winning experiment examined how genes might change under the stresses caused by being in space, such as cosmic radiation and microgravity.
Her samples were placed in a machine on board the International Space Station. called a miniPCR thermal cycler, which can copy DNA multiple times.
After the samples were examined on return to Earth, scientists were able to successfully detect changes caused by being in space in the way DNA transmits instructions through proteins and other molecules in living organisms.
Although Alia’s samples were taken from nematode worms, the results have much bigger long term applications, especially for human space flight and long term missions, such as to Mars.
It also means that the first DNA experiments using human genomes can now be carried out on the ISS.
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
The currency conundrum
Russ Mould, investment director at online trading platform AJ Bell, says almost every major currency has challenges right now. “The US has a huge budget deficit, the euro faces political friction and poor growth, sterling is bogged down by Brexit, China’s renminbi is hit by debt fears while slowing Chinese growth is hurting commodity exporters like Australia and Canada.”
Most countries now actively want a weak currency to make their exports more competitive. “China seems happy to let the renminbi drift lower, the Swiss are still running quantitative easing at full tilt and central bankers everywhere are actively talking down their currencies or offering only limited support," says Mr Mould.
This is a race to the bottom, and everybody wants to be a winner.
Killing of Qassem Suleimani
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500 People from Gaza enter France
115 Special programme for artists
25 Evacuation of injured and sick
Killing of Qassem Suleimani
Killing of Qassem Suleimani
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UAE currency: the story behind the money in your pockets
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UAE currency: the story behind the money in your pockets
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CHELSEA'S NEXT FIVE GAMES
Mar 10: Norwich(A)
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Mar 16: Lille(A)
Mar 19: Middlesbrough(A)
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Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
What it means to be a conservationist
Who is Enric Sala?
Enric Sala is an expert on marine conservation and is currently the National Geographic Society's Explorer-in-Residence. His love of the sea started with his childhood in Spain, inspired by the example of the legendary diver Jacques Cousteau. He has been a university professor of Oceanography in the US, as well as working at the Spanish National Council for Scientific Research and is a member of the World Economic Forum’s Global Future Council on Biodiversity and the Bio-Economy. He has dedicated his life to protecting life in the oceans. Enric describes himself as a flexitarian who only eats meat occasionally.
What is biodiversity?
According to the United Nations Environment Programme, all life on earth – including in its forests and oceans – forms a “rich tapestry of interconnecting and interdependent forces”. Biodiversity on earth today is the product of four billion years of evolution and consists of many millions of distinct biological species. The term ‘biodiversity’ is relatively new, popularised since the 1980s and coinciding with an understanding of the growing threats to the natural world including habitat loss, pollution and climate change. The loss of biodiversity itself is dangerous because it contributes to clean, consistent water flows, food security, protection from floods and storms and a stable climate. The natural world can be an ally in combating global climate change but to do so it must be protected. Nations are working to achieve this, including setting targets to be reached by 2020 for the protection of the natural state of 17 per cent of the land and 10 per cent of the oceans. However, these are well short of what is needed, according to experts, with half the land needed to be in a natural state to help avert disaster.
