London: Abu Dhabi’s financial holding company Mubadala Investment Co. is close to hiring Rothschild & Co. to help divest a stake in Cepsa Trading SA, a Spanish oil company valued at about 10 billion euros (Dh44 billion; $12 billion), according to people with knowledge of the matter.
Mubadala is also interviewing more banks for roles in assisting with a sale or initial public offering for the wholly-owned firm, the people said, declining to be identified as the deliberations are confidential. The listing in Madrid would be a preferred option, they said.
Mubadala is working with Cepsa’s management “to assess a range of strategic options” including a listing, strategic partnerships and the involvement of other investors, a spokesman for the firm said in response to queries. “No final decision has been taken yet” regarding the banks, he said.
Representatives for Cepsa and Rothschild declined to comment.
The move comes as Abu Dhabi combines two of its investment firms — Abu Dhabi Investment Council and Mubadala — to create a wealth fund with assets of about $250 billion (Dh918 billion), clearing the way for the capital to consolidate state-controlled companies and accelerate economic diversification in the UAE. With the changes, Mubadala is poised to play a central role in the nation’s efforts to turn oil revenue into profitable investments while also attracting technology and jobs.
Investments by Mubadala, created in 2002, include Globalfoundries Inc., a California maker of semiconductors, as well as stakes in Advanced Micro Devices Inc. and in EMI Music Publishing. The company is reviewing assets after merging with another state investment vehicle last year, giving it holdings in industries ranging from aerospace and energy to infrastructure.
Cepsa, founded in 1929, was acquired by one of Abu Dhabi’s sovereign wealth funds in 2011.
The Madrid-based company, which has a large refining and petrochemicals focus, plans to boost sales to Asia, the only major region poised to see growth in the use of refined products and of the chemicals that go into consumer goods, Pedro Miro, chief executive for the oil processor known officially as Cia. Espanola de Petroleos SAU, said in an interview in Abu Dhabi in November. The company is proving to be a good fit for its owner as Middle Eastern petro-states invest in downstream industries to ensure future use of their oil.
BOX: Mubadala Petroleum signs Andaman I PSC in Indonesia
ABU DHABI: Mubadala Petroleum on Monday announced that it has signed the Production Sharing Contract (PSC) for Andaman I, as awarded by the Government of Indonesia in the 2017 Indonesian Licence Round.
Mubadala Petroleum is the operator of the Andaman I PSC and a partner in the Andaman II PSC, operated by Premier Oil, which was also signed last week.
The Andaman I and II PSCs are adjacent and located in the underexplored but proven North Sumatra basin offshore Aceh, a region that Mubadala Petroleum has been involved in since 2011 through joint study agreements. The PSCs have the potential to unlock a new material gas play for domestic consumption in North Sumatra and indeed long term export to regional markets.
The work commitment for the Andaman I exploration block is to conduct sub surface studies and to acquire 3D seismic, in the first 3-year term.
Dr Bakheet Al Katheeri, Mubadala Petroleum’s chief executive officer, commented: “The operated Andaman I PSC and our interest in the Andaman II PSC, marks the further extension of our Indonesia portfolio with a new high impact growth hub. These new exploration blocks support our growth strategy of finding and, if successful, developing gas for Indonesia’s growing market while it has the potential to deliver significant organic growth opportunities for our existing Indonesian business in the longer term.”