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UAE oil firm inks $4B deal with BlackRock and KKR

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UAE Minister of State and ADNOC Group CEO Sultan Ahmed al-Jaber speaks during the Abu Dhabi International Petroleum Exhibion and Conference in 2017. KARIM SAHIB/AFP

UAE oil firm inks $4B deal with BlackRock and KKR

STATE-OWNED UAE energy giant Abu Dhabi National Oil Co on Sunday signed a $4 billion deal with US-based investors BlackRock and KKR granting them a minority stake in its pipeline arm.

The agreement gives the two investors a joint stake of 40 per cent in ADNOC Oil Pipeline, a newly established firm that owns all of the 18 pipelines that carry Abu Dhabi crude oil and condensates, a statement said.

ADNOC will keep the remaining 60 per cent and also have sovereignty over the pipelines and management of operations, the company said.

One of the largest national oil conglomerates, ADNOC has signed a raft of agreements with major international oil firms to attract funding and expertise in a bid to boost production of crude oil and natural gas as well as refining capacity.

Last year, ADNOC granted concession rights in existing and new oilfields and earmarked some $132 billion over the next five years to boost crude output capacity to four million barrels per day (bpd) next year and to five million bpd a decade later.

ADNOC CEO Sultan Ahmed al-Jaber said the deal demonstrates the trust of the global investment community in the company’s approach.

“We are creating a range of attractive opportunities for global and regional institutional investors to partner and invest alongside ADNOC to enhance value from our sizeable infrastructure base,” he said.

BlackRock, the world’s largest asset manager, has some $6.4 trillion under management while KKR manages a fund worth $150 billion. Both are based in New York.

Last month, ADNOC signed partnership deals worth $5.8 billion giving Italy’s Eni a 20 per cent stake in ADNOC Refining and Austria’s OMV a 15 per cent share in the refining arm.

Abu Dhabi, one of seven states that make up the UAE, holds more than 90 per cent of the federation’s 98 billion barrels of crude oil reserves.