Exclusive: #UAE's ADNOC recently eyed BP as takeover target, sources say | Reuters

Exclusive: UAE's ADNOC recently eyed BP as takeover target, sources say | Reuters

The United Arab Emirates' state-owned oil company recently considered buying Britain's BP (BP.L), opens new tab but the deliberations did not progress beyond preliminary discussions, people familiar with the matter told Reuters.

Abu Dhabi National Oil Company (ADNOC) ultimately decided BP would not be the right fit for its strategy, three people said. Political considerations also weighed on the potential move, one of the people said.

The 88 billion-pound ($110.3 billion) company has underperformed its competitors for years, which investors and analysts say has made the British firm a potential takeover target. U.S. oil giants are in the midst of the industry's biggest consolidation for decades, but European oil majors have to date not been involved.

Investors have penalized BP's plan to reduce fossil fuel production and its faster shift toward renewables than rivals such as Shell, Exxon and Chevron. In February 2023, BP rowed back on its more aggressive energy transition plans.

ADNOC, in contrast, has increased oil and gas production capacity and CEO Sultan al-Jaber is seeking to reshape the state giant in the image of a global oil major. The company, which is not publicly traded, is big enough to consider acquiring the smaller of the oil majors, BP.

ADNOC and BP spoke directly in recent months and ADNOC also sought advice from investment banks on a potential deal, two of the people said.

OPEC sees robust summer oil demand, economic upside potential | Reuters

OPEC sees robust summer oil demand, economic upside potential | Reuters

OPEC predicted robust fuel use in the summer months on Thursday and stuck to its forecast for relatively strong growth in global oil demand in 2024, highlighting an unusually large gap between predictions of oil demand strength.

The Organization of the Petroleum Exporting Countries, in a monthly report, said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025.

Both forecasts were unchanged from last month.

A boost to economic growth could give extra tailwind to oil prices, which have rallied above $90 a barrel this year on tighter supply and war in the Middle East.

OPEC and its allies, known as OPEC+, last week agreed to keep oil output cuts in place until the end of June.

"Despite some downside risks, the continuation of the momentum seen in the beginning of the year could result in further upside potential for global economic growth in 2024," OPEC said in the report.

Race for AI Supremacy in Middle East Is Measured in Data Centers - Bloomberg

Race for AI Supremacy in Middle East Is Measured in Data Centers - Bloomberg

One of the best places to view the Gulf states’ unfolding rivalry over artificial intelligence is inside an unmarked building in an industrial park near a golf course on the outskirts of Dubai. The windowless facility is cool and extraordinarily clean. Upon entering, guests step onto sticky blue floor mats designed to prevent stray sand particles from making their way inside. Like the scorching heat outside, any speck of desert dust could be hazardous to the multimillion-dollar equipment stored within.

The 23,648-square-foot complex opened in September, 18 months after construction began. It’s the fourth facility in the United Arab Emirates operated by Equinix Inc., a data center developer based in Redwood City, California. The company is also weighing expansion into neighboring Saudi Arabia.

Saudi Arabia and the UAE both want to become the regional AI superpower, and their budding rivalry has kicked off a race to build expensive desert data centers to support the technology. Data centers alone won’t transform any country into an AI heavyweight, but no country can become one without them. Countries want the facilities within their borders for technological reasons—being close to customers can ease access to services and speed it up—and for geopolitical reasons, because the valuable data housed in the servers will be subject to local regulations and insulated from foreign meddling.

In Saudi Arabia, where the economy still relies heavily on hydrocarbons, AI tech is part of Crown Prince Mohammed bin Salman’s Vision 2030 strategy, which aims to identify new revenue sources. It has launched major research centers and ministries devoted to AI and produced large-language models similar to OpenAI Inc.’s ChatGPT, as has the UAE. And both counties are hoarding thousands of customized chips, according to the Financial Times. This week, Bloomberg reported that OpenAI chief executive officer Sam Altman recently met with government officials and investors in the UAE to discuss how the private sector can work with countries to support large-scale AI infrastructure.

In early March, Abu Dhabi announced an AI investment fund that could swell to $100 billion within a few years, and Saudi Arabia’s sovereign wealth fund is in talks with venture capital powerhouse Andreessen Horowitz about allocating as much as $40 billion to AI investments. “The region is business-friendly,” says Kamel Al-Tawil, Equinix’s managing director for the Middle East and North Africa. “The economy is strong. Power prices are stable. We’re seeing a lot of momentum.”