KKR, Blackrock Pen $4bn Deal With ADNOC
Investor firms Black Rock and KKR signed an agreement during the weekend worth $4 billion with ADNOC or the Abu Dhabi National oil company for development of pipeline infrastructure. This is the first time that institutional investors have invested in this middle-east national oil producer and is a landmark partnership for all three involved. This is also the latest step for the firm to diversify its revenue sources and bring in private capital that will enable professional management of the company and will represent move away from existing bureaucratic setup. The agreement will lead to formation of a new entity named ADNOC Oil Pipelines that will lease 18 of ADNOC’s existing pipelines that transports stabilized crude and condensate spread across both its offshore and onshore upstream platform concessions for next 23 years. ADNOC stated that it will retain around 60% majority stake in the new consortium.
CEO Larry Fink of BlackRock stated that this initiative is aimed at getting foreign capital for the oil major and enhancing its potential in global financial markets and that both KKR and Blackrock will be 40% shareholders in the consortium. He stated that across the world now investors are seeking better and high quality assets that can yield sustained results. Since 2018, around $6.4 trillion worth of assets are under management said BlackRock, that is regarded as biggest asset manager in the world. Fink has always focused on importance of transparency and good governance to bring international capital into areas that have fallen short of funds. In the few months ADNOC has signed several agreements with several international and oil and gas firms like Italy’s ENI and Austria’s OMV within its refinery wing worth $5.8 billion. Two European firms during December collaborated with Germany based Wintershall to pick up minority stake in ADNOC’s offshore gas fields while Baker Hughes has recently won a 5% stake in ADNOC’s drilling unit.