UAE oil giant ADNOC enters the fray

The water oil giant, DNOC, has joined the fray of companies that would go around some of the COPvery popular active ingredients, as buyout speculation For the Major of the besieged energy in Overdrive.

It is believed that the National Petroleum Society of Abu Dhabi would weigh a decision of some of the assets of the listed company, if the oil major separates or seeks to sell more units, Bloomberg reported Wednesday, citing anonymous sources familiar with the issue.

DNOC is would have Most interested in liquefied natural gas assets of BP (LNG), although it would also have considered a complete takeover of the company. It is heard by Bloomberg that any potential transaction would probably take place via the international DNOC unit, XRG.

BP, DNOC and XRG spokesperson refused to comment on speculation when contacted by CNBC.

An extended period of underperformance compared to its peers of the industry put the BP under the spotlight as a leading candidate. British rival Shellas well as American oil giants Exxon Mobil And Chevronare among some of the names that have been presented as possible suitors.

Any potential agreement between DNOC and BP is considered far from a prefabricated conclusion, but analysts emphasize that the two companies share a long -standing relationship through hydrocarbons and renewable energies on a range of geographies, in particular In Abu Dhabi And more recently in Egypt.

The former CEO of BP Bernard Looney, who left the company After less than four years of work in September 2023 was on the Board of Directors of XRG alongside the CEO of DNOC, Sultan al-Jaber.

Maurizio Carulli, a global energy and material analyst at Quilter Cheviot, said that the alleged interest of DNOC for certain BP assets is a “significant” development – although the one who is somewhat awaited, since DNOC is a growing and rich in cash company that seeks to develop more in gas.

“That said, it seems unlikely that Adnoc is considering a complete offer for BP as a whole since the company would not be strategically interested in BP petroleum assets. However, some other oil majors listed could,” Carulli to CNBC by e-mail told.

“The discreet BP active ingredients, upstream and downstream, will undoubtedly capture a great interest in a certain number of energy and investment capital players,” he added.

Last month, BP would have aroused the interest of a certain number of possible buyers for its activities of Castrol lubricants, one unit considered as one of the “Crown jewels“From his portfolio.

Energy companies such as India Reliance Industries and Saudi Arabia Aramoth, as well as capital-investment companies, Apollo Global Management and Lone Star Funds, were all presented before as pretenders for the Castrol unit of BP, Bloomberg reported May 28, citing people familiar with the issue.

Aramco, Apollo Global Management and Lone Star refused to comment on the report. CNBC also contacted Reliance Industries.

BP seeks to push potential control by restoring investors’ confidence. The company launched a fundamental strategic reset Earlier in the year and, despite the publication of lower than expected profits in the first quarter, CEO Murray Auchincloss told CNBC at the end of April that the company was “For a good start“By delivering his new direction.

BP actions have stabilized in recent weeks, after a strong fall in early April, as Volatility of the trade war Shaken financial markets. The share price is down more than 4% of the year to date.

Allen Good, director of research on actions in Morningstar, said it was unlikely that BP will be ready to separate with important elements from its upstream portfolio, since the recent green strategy of the company is to be doubled to double the hydrocarbons.

As part of BP’s strategic reset, the company announcement plans to increase the annual oil and gas expenditure to investment to $ 10 billion until 2027, while reducing expenses for renewable energies. It also targets $ 20 billion in disinvestment in the coming years.

“The pressure of activists was more on additional costs and reductions in capital, not necessarily basic divests. It is unlikely that the rupture of the company is the solution that shareholders are looking for,” said Allen in CNBC by e-mail.

For Xrg, who DNOC spear Last year, interest reports in certain BP assets occurred while the investment company seeks agreements on gas and chemicals assets to help it reach a business value of $ 80 billion.

“We are committed to providing long-term value for our stakeholders and strengthening Abu Dhabi and the role of water as a world leader in energy and chemicals,” said Dnoc al-Jaber at the time.

RUSS MLUD, investment director at AJ Bell, said all potential transactions between DNOC and BP were likely to be harshly ordered, each party striving to defend its own interests.

“BP is under pressure to deliver its objective of reducing debt, thanks to the improvement of organic cash flows and asset arrangements,” Moli MMO told CNBC.

“DNOC will be well aware of this, and how the clock can be checked with regard to BP management, and it will therefore seek to stimulate a good deal in the process, if it is actually interested in some of the BP assets, as reported,” he added.