BP and ADNOC Form New Natural Gas Joint Venture in Egypt

By Yousef Saba
DUBAI (Reuters) – BP (NYSE:BP) and Abu Dhabi National Oil Company’s international investments arm XRG announced on Monday the closing of a deal for a new natural gas joint venture in Egypt, as ADNOC expands its international presence.

The joint venture, Arcius Energy, is 51% owned by BP and 49% by XRG, initially operating in Egypt.

Naser Saif Al Yafei, a veteran of ADNOC, has been appointed as chief executive of Arcius. Previously, he led strategy, sustainability, and transformation at ADNOC Gas. Katerina Papalexandri, the vice president of gas and low carbon energy growth at BP, takes on the role of chief financial officer.

"Arcius Energy combines the strengths of our two companies, creating a robust platform for international growth in natural gas in the region," said BP's Chief Executive Murray Auchincloss. He emphasized that Egypt serves as a hub for significant opportunities to develop a competitive gas portfolio in the area.

Sultan Al Jaber, XRG's executive chairman and ADNOC CEO, remarked that the joint venture aligns with XRG's goals to enhance energy system transformation and develop an integrated gas and chemicals portfolio to satisfy rising global demand.

Arcius holds concessions in Egypt, including a 10% interest in Shorouk, home to the giant Zohr field operated by Eni, and full ownership of North Damietta, which contains the producing Atoll field operated by Pharaonic Petroleum Company. It also has exploration agreements for North El Tabya, Bellatrix-Seti East, and North El Fayrouz.

ADNOC revealed last week that the newly established XRG's board includes notable figures such as Jon Gray from Blackstone (NYSE:BX) and former BP CEO Bernard Looney, who was dismissed from BP last December for failing to disclose past relationships.

The inclusion of prominent financial and energy leaders on XRG's board indicates the entity's ambitious plans, as ADNOC advances its aggressive growth strategy.

XRG, valued at over $80 billion according to ADNOC, will prioritize investments in low-carbon energy, including gas, chemicals, and renewables.