bp and XRG establish Arcius Energy to drive Egypt’s natural gas expansion

bp and XRG, the international energy investment arm of Abu Dhabi National Oil Company (ADNOC), have officially closed their agreement to launch Arcius Energy, a pioneering natural gas platform focused on developing gas assets in Egypt. This strategic partnership marks a new chapter in the longstanding collaboration between bp and ADNOC, one that combines technical expertise, operational efficiency, and ambitious energy goals to address growing regional gas demand.

The joint venture, announced in February 2024, positions Arcius Energy as a cornerstone for Egypt’s energy security while accelerating natural gas development as a lower-carbon transition fuel. bp will hold a 51% majority stake, while XRG will control 49%, reflecting its role as ADNOC’s transformative investment vehicle.

What is Arcius Energy’s Strategic Focus?

Arcius Energy will centre its operations on natural gas growth in Egypt, a key energy hub, by leveraging high-potential development concessions and exploration agreements. The platform begins its journey with major assets assigned by bp, including:

The Shorouk concession, home to the prolific Zohr gas field, where bp holds a 10% stake through Belayim Petroleum (Petrobel).

The North Damietta concession, operated by bp, which hosts the producing Atoll field.

Exploration rights in the North El Tabya, Bellatrix-Seti East, and North El Fayrouz concession areas.

By combining bp’s technical capabilities with XRG’s investment expertise, Arcius Energy aims to scale natural gas operations, enhance production, and meet the surging demand for clean, affordable energy in Egypt and the broader region.

Why is Natural Gas Crucial for Energy Transition?

Natural gas plays a pivotal role in the global shift toward a lower-carbon future. As a cleaner-burning fuel, it offers a practical bridge between fossil-based energy systems and renewables like solar and wind. Arcius Energy’s focus on natural gas platform development aligns with the need for reliable energy sources that balance economic growth, energy security, and climate goals.

H.E. Dr. Sultan Ahmed Al Jaber, Executive Chairman of XRG, highlighted the significance of the partnership, stating that Arcius Energy aligns with XRG’s vision to build a world-class integrated gas and chemicals portfolio. He noted that the collaboration with bp will unlock critical energy resources to advance Egypt’s energy security while contributing to global energy stability.

Murray Auchincloss, Chief Executive Officer of bp, echoed this sentiment, describing Arcius Energy as a dynamic platform for natural gas growth. He emphasised bp’s six decades of operational excellence in Egypt, positioning the company to deliver competitive gas solutions while supporting economic and environmental objectives.

How Will Arcius Energy Benefit Egypt’s Economy?

Arcius Energy’s establishment is poised to drive significant economic benefits for Egypt by expanding natural gas production, fostering job creation, and supporting industrial development. Egypt’s strategic location as a regional energy hub makes it an ideal base for natural gas operations, enabling exports to European and Asian markets.

With Egypt already producing around 70% of its gas through bp-led projects in the West and East Nile Delta, Arcius Energy will further enhance the country’s energy production capacity and infrastructure. Increased output from major fields like Zohr and Atoll will not only bolster energy security in Egypt but also support domestic industries and power generation.

bp and XRG: A Partnership Built on Trust and Innovation

The collaboration between bp and ADNOC spans more than 50 years, reflecting a shared commitment to energy innovation and operational excellence. XRG, as ADNOC’s international investment vehicle, brings unparalleled financial strength and a focus on lower-carbon energy solutions. Its $80 billion enterprise value underscores its ability to drive transformative projects that address global energy challenges.

Arcius Energy’s leadership reflects this strategic alignment, with Naser Saif Al Yafei from ADNOC appointed as Chief Executive Officer and Katerina Papalexandri of bp as Chief Financial Officer. Together, they bring decades of experience in energy sector operations and financial strategy, positioning Arcius Energy for long-term success.

What’s Next for bp and XRG’s Energy Ambitions?

Arcius Energy is just one component of bp and XRG’s broader strategy to expand lower-carbon energy solutions. In June 2024, bp announced its intent to acquire a 10% interest in ADNOC’s Ruwais LNG project, subject to approvals. The project, set to deliver 9.6 million tonnes per annum of liquefied natural gas (LNG), represents a major step in meeting global demand for cleaner energy.

Both bp and ADNOC are also founding members of the Oil and Gas Decarbonization Charter (OGDC), a global initiative launched during COP28 in Dubai. The OGDC aims to accelerate climate action across the energy sector, further underscoring their commitment to balancing energy production with environmental stewardship.

Advancing Egypt’s Energy Future

Arcius Energy represents a landmark development in Egypt’s natural gas sector, combining bp’s operational expertise with XRG’s transformative vision. As the joint venture focuses on natural gas platform growth and energy security for Egypt, it will play a crucial role in supporting the region’s economic development and transition to lower-carbon energy solutions.

With significant gas assets under its management and exploration opportunities on the horizon, Arcius Energy is well-positioned to deliver clean, reliable energy that meets domestic and regional demands.