#AbuDhabi’s Adnoc Is Said to Mull Buying Mubadala Energy Assets - Bloomberg

Abu Dhabi’s Adnoc Is Said to Mull Buying Mubadala Energy Assets - Bloomberg

Abu Dhabi’s state oil firm is weighing plans to buy the energy assets of sovereign wealth fund Mubadala Investment Co., according to people with knowledge of the matter.

Abu Dhabi National Oil Co. started negotiations with Mubadala late last year, though talks stalled in recent months amid disagreements over valuation, the people said, asking not to be named because the information is private. At the time, the firms were discussing a deal worth about $10 billion, according to one of the people.

Talks are likely to resume soon, potentially after Ramadan ends in March, some of the people said. Executives at Adnoc and Mubadala, along with leaders in Abu Dhabi, are keen to pursue a deal, they said.

No final decisions have been made, and a transaction ultimately may not materialize. Mubadala declined to comment, while representatives for Adnoc didn’t immediately respond to requests for comment.

The fund owns gas fields in Thailand and Indonesia, projects in Malaysia and an oil joint venture in Oman. It’s also a majority shareholder in Dolphin Energy Ltd., which processes gas from a massive field in Qatar and transports it by pipeline to the UAE.

Ownership of the assets would stay within Abu Dhabi after any deal as the emirate tries to reorder state holdings and give entities specific industry focus. During the past year, the city — capital of OPEC member the United Arab Emirates — set up new vehicles to deploy capital across sectors ranging from artificial intelligence to energy.

As part of that push, Mubadala, which manages $330 billion in assets, has been looking to offload some of the energy portfolio acquired during the past decade as it shifts focus to health care, finance and technology.

A successful deal would cement Adnoc’s strategy around oil and gas. The firm manages the UAE’s vast fields at home and is pushing into related sectors overseas. It also created an overseas investment firm called XRG PJS, and has been transferring its global assets into that.

Adnoc recently announced a $13.4 billion deal to buy Nova Chemicals from Mubadala as part of a larger transaction to merge two chemical units that will give the energy firm greater presence in North America, including production facilities on the US Gulf Coast.

Last year, the company agreed to the $13 billion purchase of German chemical maker Covestro AG, which will be the biggest acquisition of a European company by a Middle Eastern firm when completed. The oil producer has also taken stakes in a liquefied natural gas export facility in the US along with supply contracts for the fuel.