ADNOC and bp forge new JV to expand gas portfolio in Egypt

In a landmark move set to redefine the energy sector in Egypt, Abu Dhabi National Oil Company (ADNOC) and British petroleum giant bp have announced the formation of a new joint venture (JV), signaling a significant shift towards enhancing Egyptian energy security and fostering regional economic potential. This JV, owned 51% by bp and 49% by ADNOC, merges the deep technical capabilities and proven track records of both companies to cultivate a highly competitive gas portfolio.

Under the terms of the agreement, bp will integrate its interests in three development concessions and exploration agreements in Egypt into the JV. Correspondingly, ADNOC will contribute a proportionate cash injection to fuel future growth opportunities. This strategic partnership not only underscores the commitment of both entities to Egypt’s energy sector but also marks a pivotal step in ADNOC’s ambitions to expand its international natural gas portfolio.

Musabbeh Al Kaabi, ADNOC’s executive director for low carbon solutions and international growth, highlighted the JV’s role in bolstering Egyptian energy security and the economic prospects of the Arab world’s most populous nation. “This progressive joint venture partnership will enhance Egyptian energy security and the economic potential of the region’s most populous Arab country,” Al Kaabi stated, emphasizing the intention to decarbonize operations and lead a just and equitable energy transition.

Echoing the sentiment, William Lin, bp’s executive vice president of regions, corporates & solutions, reflected on the JV as an extension of the longstanding partnership with ADNOC, spanning over five decades. Lin pointed out that the collaboration aims to continue delivering secure, lower-carbon energy to Egypt, leveraging bp’s extensive experience in the country.

The concessions included in the JV—Shorouk, North Damietta, and North El Burg—house significant gas fields like Zohr and Atoll, and the yet-to-be-developed Satis field, promising to bolster Egypt’s gas production capabilities. Additionally, exploration concessions such as North El Tabya, Bellatrix-Seti East, and North El Fayrouz are part of the agreement, setting the stage for further exploration and development.

Pending regulatory approvals, the JV is expected to be finalized in the second half of 2024, further strengthening the strategic partnership between ADNOC and bp. This collaboration extends beyond natural gas development, encompassing initiatives in renewables, carbon capture, and storage technology. Both companies are also founding members of the Oil and Gas Decarbonization Charter, launched during COP28 in Dubai, underscoring their commitment to accelerating climate action across the energy industry.

With bp producing approximately 70% of Egypt’s gas, this joint venture not only reinforces the existing energy infrastructure but also aligns with global efforts to transition towards cleaner energy sources, highlighting the critical role of strategic partnerships in shaping the future of the energy sector.