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ADNOC Considered BP as Takeover Target

According to sources familiar with the matter, the Abu Dhabi National Oil Company (ADNOC), the United Arab Emirates’ state-owned energy giant, recently considered a potential takeover of BP, the British multinational oil and gas company. However, these deliberations did not progress beyond preliminary discussions.

This revelation comes amidst ongoing collaboration between the two companies. Notably, in February 2024, ADNOC and BP jointly announced the formation of a venture focused on developing natural gas assets within Egypt. Additionally, they had previously submitted a bid to acquire a 50% stake in Israeli gas producer NewMed, although this deal is currently on hold due to regional tensions.

The rationale behind ADNOC’s potential interest in acquiring BP is unclear. Some analysts speculate that ADNOC might have sought to expand its global reach and upstream oil and gas production capabilities through such a large-scale acquisition. BP’s established presence in key geographic regions and diverse portfolio of assets could have been attractive to ADNOC.

However, the potential deal faced significant hurdles. Such an acquisition’s sheer size and complexity would have necessitated extensive negotiations and regulatory approvals. Furthermore, the recent volatility in global energy markets and the ongoing geopolitical landscape might have introduced additional elements of uncertainty.

The potential impact of a successful ADNOC takeover of BP on the global energy landscape would have been noteworthy. The combined entity would have emerged as a dominant player within the industry, potentially influencing oil and gas prices and production strategies. However, as the discussions did not materialize, such speculation remains hypothetical.

It is important to note that the National Security and Investment (NSI) Act, which came into effect in the United Kingdom in 2022, empowers the British government to intervene in certain acquisitions on national security grounds. This act could have posed a potential challenge for ADNOC, as the acquisition of BP would likely have triggered heightened scrutiny from UK authorities.

Looking ahead, it remains to be seen whether ADNOC will revisit the possibility of acquiring BP or pursue other strategic initiatives to expand its global footprint and influence within the energy sector. The ongoing collaboration between the two companies on ventures like the one in Egypt suggests that a level of partnership is still possible, even if a full-scale acquisition is no longer under consideration.

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