Key Points
- BP and XRG launch Arcius Energy to grow Egypt’s gas sector.
- Arcius Energy secures stakes in Zohr, Atoll, and key concessions.
- XRG aims to double assets, focusing on gas and chemicals.
A joint venture between BP and XRG, which is sponsored by Abu Dhabi, has been concluded to create Arcius Energy, a new natural gas business with activities in Egypt. XRG controls 40% of the company, while BP owns 51%.
The collaboration is a significant milestone in XRG’s efforts to build a top-tier gas and chemicals portfolio and BP’s regional expansion.
BP and XRG launch Arcius Energy to drive Egypt gas growth
Murray Auchincloss, CEO of BP, characterized the action as a “dynamic new platform for international growth in natural gas in the region,” emphasizing XRG and BP’s complementary strengths.
A 10% share in the Shorouk concession, which contains the giant offshore Zohr gas field, has been awarded to the recently established Arcius Energy. Additionally, it owns exploration rights in the North El Tabya, Bellatrix-Seti East, and North El Fayrouz blocks, as well as a 100% stake in the North Damietta concession, which is the location of the producing Atoll field.
Naser Saif Al Yafei, a veteran of ADNOC, has been named Arcius Energy’s CEO. The venture will be led by Al Yafei, who was previously ADNOC Gas’s head of strategy and sustainability. BP’s vice president for gas and low-carbon energy growth, Katerina Papalexandri, will take over as chief financial officer (CFO).
XRG aims to double assets with focus on gas and chemicals
With an emphasis on gas, chemicals, and low-carbon energy, XRG, the recently formed investment arm of Abu Dhabi’s sovereign wealth portfolio, hopes to double its assets over the course of the next ten years. Although it is officially separate from ADNOC, its tactics are influenced by the latter’s overarching objectives.
According to Oilprice, Blackstone President Jon Gray and former BP CEO Bernard Looney, who continues to have direct ties to BP even after leaving in 2023, are on the board of XRG. With the goal of becoming a top-5 global chemicals producer, XRG’s establishment places it as a major participant in low-carbon energy investment.
With demand predicted to increase by 70–90 million metric tons by 2040, its low-carbon energy division is concentrated on clean energy, including low-carbon ammonia.
Other noteworthy actions include buying a 24.9% stake in Austria’s OMV AG from Mubadala Investment Company and obtaining a controlling position in Fertiglobe (50% + 1 share) from OCI. In an indication of possible wealth creation for shareholders, ADNOC is also looking into options for a possible IPO of ADNOC Gas.
