UAE’s Brooge Petroleum eyes international acquisitions amid IPO talks

UAE-based terminal operator Brooge Petroleum and Gas Investment Company plans to acquire operators of similar scale and size even as it plans to float 40 per cent of its shares in an international listing, its chief executive said.

"We’re looking at every possibility. If you’re in this kind of industry there are not too many companies. There are some opportunities in the east and the west and some opportunities in Africa,” Nicolaas Paardenkooper told reporters in Fujairah, during a ceremony marking the start of the operator’s phase two expansion.

The UAE, which accounts for around 4.2 per cent of global oil production, is a major player in the crude storage industry through hubs such as Fujairah, which is the world’s second largest bunkering port behind Singapore. Just outside the congested Strait of Hormuz, Fujairah has the capacity to handle as much as 60 million barrels of crude and oil products, with capacities expected to increase with the entry of players such as Brooge Petroleum.

The UAE firm, which has a capacity of nearly 400,000 cubic metres of storage for petroleum products, middle distillates and fuel oil, is looking to add up to 600,000 cubic metres of additional capacity, particularly for oil, with the completion of this next expansion.

“We’re starting construction, with a completion time of 18 months and we’re aiming for operation by Q2 2020,” said Mr Paardenkooper. The company inaugurated phase one last year.

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He said plans were also being considered for further phases at the terminal, however the firm’s initial public offering exercise was not intended to fuel this expansion. He declined to specify how proceeds from an IPO will be utilised, but clarified the company would only seek a single listing.

“We’re on the brink of a final decision and I can imagine it will not be for a dual listing,” said Mr Paardenkooper.

Brooge Petroleum is mulling a listing for up to 40 per cent of its shares, which it expects to raise up to $400 million.

The company was in discussions with “local banks” as well as with international lenders to advise on a possible listing in London. Mr Paardenkooper declined to name the banks that had been hired to advise on the transactions, or the timeline for the flotation.

The UAE operator, which is keen to seek opportunities for engagement with international terminal operators in Asia and Africa, said it was eyeing existing as well as greenfield schemes.

The firm is engaging international investors to grow into these opportunities and in the local market with more “retail type” of investors, said Mr Paardenkooper.

“[For] Fujairah, to increase its relevance, [we’re looking at] a global floatation, for BPGIC. We can blend at high speeds," he said. Fujairah has "emerged from nothing to the second largest bunkering hub. Customers are here and they know what we're talking about. I believe that’s a very very good opportunity”.