Mubadala will hold Abu Dhabi’s $2.2 billion stake at BP

Abu Dhabi’s new US$2.2 billion stake in BP will be held by Mubadala Development Company, the government’s strategic investment company.

The emirate’s 2 per cent stake in BP, which makes it one of the oil major’s largest shareholders, is the result of a deal struck last week in exchange for BP’s 10 per cent stake in Abu Dhabi Company for Onshore Oil Operations (Adco), the onshore concession that accounts for a little more than half of Abu Dhabi’s 3.1 million barrels per day of output.

“We will be owning and managing the shares on behalf of the Abu Dhabi government consistent with our portfolio and mandate as an investment company,” said Brian Lott, the executive director at Mubadala.

The BP stake will be managed in the Mubadala unit that oversees the group’s capital investments. Mubadala is in the process of merging with International Petroleum Investment Company to form a $125bn company.

It includes a large energy subgroup that has controlling stakes in oil companies including Cepsa and OMV, as well as direct operation of oilfields in South-east Asia and elsewhere.

The BP stake will be viewed as more of a passive investment. It is not yet clear whether Abu Dhabi will seek BP board representation. Adco’s parent, Adnoc, negotiated the deal that included the BP stake as well as terms for its participation in Adco and operation of Bab, one of the six main oilfields in the concession.

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