BlackRock and KKR have signed a $4 billion agreement with the Abu Dhabi National Oil Co. (ADNOC) to become the first institutional investors joining forces with a national oil producer in the Middle East.
ADNOC will retain a 60 percent majority stake, with BlackRock and KKR collectively holding a 40 percent interest in the consortium.
The deal represents a landmark partnership in midstream pipeline infrastructure development for ADNOC.
The agreement forms a new entity called ADNOC Oil Pipelines, which will lease ADNOC’s interest in 18 pipelines, transporting stabilized crude oil and condensate across ADNOC’s offshore and onshore upstream concessions for 23 years.
ADNOC has been expanding through strategic partnerships. Last month, ADNOC awarded Italy-based ENI and Thailand-based PTT Exploration and Production (PTTEP) two offshore exploration blocks, covering a combined area of more than 8,000 square kilometers (50,000 miles). The blocks, called Offshore 1 and Offshore 2 in the emirate’s northwest, are the first to be awarded among the areas ADNOC offered for commercial bidding as part of Abu Dhabi’s first-ever competitive open block licensing round that began in April 2018.
Under the agreement, Eni will operate the areas and PTTEP and Eni will invest at least $230 million for oil and gas exploration. The two companies will both hold a 100 percent stake in the exploration phase.
And in December, ADNOC awarded Austrian energy firm OMV a 5 percent stake in the Ghasha concession, the third foreign partner for the ultra-sour gas project that contains high levels of sulphur.
OMV, which is partly owned by Mubadala Investment Co., joins fellow European energy companies Eni and Germany-based Wintershall as partners on the concession.
The firm will contribute 5 percent to the project capital and operational development expenses.
