BlackRock, KKR near sale of ADNOC oil pipeline stake to ADQ

Dubai: BlackRock and KKR & Co. are nearing a deal to sell their multibillion-dollar stake in Abu Dhabi National Oil Co.’s oil pipeline network to local sovereign wealth fund ADQ, people with knowledge of the matter said.

The private equity firms are set to divest the combined 40 per cent holding in ADNOC Oil Pipelines to Abu Dhabi’s ADQ as early as this week, the people said, asking not to be identified discussing confidential information. The stake is set to fetch more than $4 billion including debt, the people said.

BlackRock and KKR bought the stake in ADNOC Oil Pipelines four years ago in what was the first investment by foreign asset managers in the infrastructure of a state-owned oil producer in the Middle East.

ADNOC further reduced its stake in ADNOC Oil to around 51 per cent later in 2019 after selling shares to Abu Dhabi Retirement Pensions & Benefits Fund and Singapore sovereign wealth fund GIC. ADNOC Oil has leases on 18 pipelines and the Abu Dhabi state oil firm continues to manage the pipelines, according to a statement that year.

Any agreement would add to a flurry of potential deals by Abu Dhabi. ADNOC and Austria’s OMV are exploring a combination of Borouge and Borealis to create a chemicals and plastics company worth more than $30 billion, Bloomberg News reported this month. The energy group is also pursuing a $12 billion takeover of German polymers producer Covestro.