ADNOC’s XRG, bp close deal to launch new natural gas JV

XRG, ADNOC’s transformative energy investment company, and bp have completed the formation of their new joint venture, Arcius Energy, a platform aimed at developing a competitive natural gas portfolio in the Middle East and beyond.

Announced earlier in February, the venture marks a strategic alignment between the two companies, with bp holding a 51 per cent stake and XRG 49 per cent.

The newly formed company will initially operate in Egypt, leveraging bp’s existing assets and exploring new opportunities in the region.

Arcius Energy combines bp’s technical expertise and the operational strengths of XRG to develop natural gas projects that contribute to the region’s energy transition, emphasising a lower-carbon future.

Strategic expansion into Egypt’s gas sector

Arcius Energy’s operations will begin with assets assigned by bp, including stakes in two key development concessions in Egypt: the Shorouk concession (with a 10 per cent interest) that contains the producing Zohr field, and the North Damietta concession (100 per cent bp interest), which holds the producing atoll field.

The platform will also focus on several exploration projects, including the North El Tabya, Bellatrix-Seti East and North El Fayrouz concessions.

The formation of Arcius Energy is a direct response to Egypt’s growing demand for cleaner energy sources, with bp continuing to play a pivotal role in the country’s energy landscape.

Together with its partners, bp currently produces around 70 per cent of Egypt’s gas, particularly through developments in the West and East Nile Delta.

As part of the launch, senior leadership for Arcius Energy has been appointed. Naser Saif Al Yafei, from ADNOC, has been named the company’s CEO, while Katerina Papalexandri, from bp, takes on the role of CFO. Both executives bring decades of experience in the energy sector and will guide the new platform’s operations and growth strategy.

XRG-bp: Strengthening a long-standing partnership

Dr Sultan Ahmed Al Jaber, executive chairman of XRG, expressed excitement over the partnership’s potential to accelerate energy transformation.

He said: “The formation of Arcius Energy marks an exciting new chapter in our long-standing partnership with BP, and fully aligns with XRG’s objectives to accelerate the transformation of energy systems and build a world-scale integrated gas and chemicals portfolio to meet rising global demand.

“This progressive partnership will unlock a lower-carbon transition fuel to build a future where smarter, cleaner, and more affordable energy is accessible for Egypt and the world.”

Murray Auchincloss, CEO of bp, highlighted the platform’s role in expanding bp’s gas portfolio in the region, emphasising the company’s 60 years of experience in Egypt. He said: “Arcius Energy brings together the strengths of our two companies to create a dynamic new platform for international growth in natural gas in the region. ADNOC, and now XRG, is a trusted partner, who we have worked with successfully for over five decades.

“Together, we can continue to build on bp’s 60 years of technical expertise and delivery of safe and efficient operations in Egypt – a hub for new opportunities to build out a highly competitive gas portfolio in the region.”

ADNOC and bp are also founding members of the Oil and Gas Decarbonization Charter (OGDC), launched during COP28 in Dubai.

Further plans for regional growth

The formation of Arcius Energy also reflects bp’s broader regional strategy, which includes a growing interest in ADNOC’s liquefied natural gas (LNG) initiatives.

In June, bp confirmed its intent to take a 10 per cent interest in ADNOC’s planned Ruwais LNG project, subject to necessary approvals.

The project, led by ADNOC with a 60 per cent stake, is set to include two 4.8 million tonnes per annum (mmtpa) liquefaction trains, bringing the total LNG capacity to 9.6 mmtpa once completed.