Abu Dhabi National Energy is reportedly planning to purchase a number of BP plc (ADR)(NYSE:BP)’s North Sea assets in lieu of $1.3 billion in a sign relations between the Gulf emirate and Britain are on the fix.
The agreement comes to surface weeks after a visit by PM David Cameron to the emirate amid reports of BP being on the verge of losing its major role in the oil sector of the UAE owing to troubled relations between the two nations.
The sale indicates the BP could still win back its rank in the UAE, where the oil giant used to play a significant role since the start of the oil industry back in the 1930s.
The deal is crucial for TAQA as it boosts access to North Sea production, which happens to be the home to the international oil benchmark Brent. Companies get important insight into oil pricing patterns when they work in North Sea fields.
Cameron was cited in a TAQA statement that this is a vote of confidence in the UK economy and it emphasizes on the position of North Sea as a global energy hub.
TAQA mentioned that the deal has followed a productive dialogue between the oil and gas markets and the UK Treasury, leading to changes to the tax management of North Sea assets.
TAQA is owned 75% by the Abu Dhabi government. It happens to be the largest shareholder from the UAE in Britain, having invested more than $3 billion over a span of 4 years.
BP requires cash for repayments as part of the settlement for its US Macondo oil spill. It mentions that the TAQA agreement brings its asset divestment scheme close to the projected $38 billion as it has now inked an agreement to sell assets valued at around $38 billion.
TAQA gas shares in the power and energy industry from India to the Middle East and Canada, plans on spending about $2 billion each year on capital investments.