Qatar is ploughing more of its commodity wealth back into the sector with the purchase of a major stake in Royal Dutch Shell, while also reportedly eyeing a chunk of Italian oil major ENI.
A Shell spokeswoman confirmed the purchase while declining to detail its size but the Middle East Economic Survey (MEES) reported earlier that Qatar’s sovereign wealth fund (QIA) was looking at a three to five per cent stake.
If Qatar did buy five percent, it would be just ahead of Blackrock, which is currently Shell’s biggest investor with 4.97 per cent, according to Reuters data.
But British stock market rules require any party to disclose a holding of over three percent in a listed company so the absence of a statement from Qatar suggests its interest is below this level.
“We are delighted to welcome the Qatar Investment Authority as a long term and major shareholder in Shell, and particularly given our excellent strategic relationship with the Qatari state,” the spokeswoman said in an emailed statement.
Shell operates multi-billion dollar natural gas projects in Qatar.
Two analysts said the Qatar fund might be interested in buying the ENI stake of around 3.4 per cent that state-controlled finance company CDP could sell to help fund its acquisition of a stake in transmission operator Snam from Eni.
The CDP and the Italian treasury own just over 30 per cent of ENI and annulment of the group’s treasury shares would increase their stakes.
A source close to the matter said a series of sovereign funds had met with CDP to discuss a possible stake in ENI.
“The plan to separate ENI from Snam involving Eni’s annulling treasury shares and the CDP selling the excess stake it would get is in pole position among the options on the government’s agenda,” the source said.
Prime Minister Mario Monti had a meeting with the Emir of Qatar in Rome in April.
Monti told reporters at the end of that meeting that Qatari institutions had shown interest in long-term investments in Italy.
In Italy, investors must inform the market regulator Consob when they buy stakes of more than two per cent in a listed company.
A senior executive of the Qatari fund said in April that the financial crisis had restricted investment in commodities and that he expected a supply-demand gap to emerge by 2016 or 2017.
“We like commodities, we like to invest in commodities. Since 2002, the commodity price trend keeps going up,” Qatar Investment Authority Executive Board Member Hussain al-Abdulla told reporters.
Qatar Holding, a unit of QIA, said last month that it had increased its stake in French oil group Total to three per cent and is undecided on buying more shares.
Qatar signed a deal in April to co-invest $250 million with Barclays’ natural resources private equity investment unit.
QIA has been the most active of the region’s sovereign wealth funds in recent years, deploying profit into assets ranging from German sports car maker Porsche to British bank Barclays.
The fund has also been slowly buying into London-listed miner Xstrata recently. Its current holding in Xstrata, which is planning to merge with commodities trader Glencore, is about 7.2 per cent.
On Friday, the Financial Times reported Qatar’s sovereign wealth fund planned to increase its Xstrata stake to at least ten per cent as part of a long-held strategy to invest in Glencore, suggesting the Gulf state could provide crucial support to the pair’s $90 billion merger deal.
Qatar surprised many observers by passing on the Glencore initial public offering last year as rival Abu Dhabi fund Aabar bought into the flotation.