OGV Energy Newsbytes

bp and Apollo today announce an agreement for Apollo-managed funds (the “Apollo Funds”) to purchase a non-controlling stake in bp Pipelines TAP Limited, the bp subsidiary that holds a 20% share in Trans Adriatic Pipeline AG (TAP) in a transaction valued at approximately $1 billion. Upon completion, bp will remain the controlling shareholder of bp Pipelines TAP Limited.

Trans Adriatic Pipeline AG is the owner and operator of a key infrastructure asset for meeting European energy demand - the final 880-kilometre leg of the Southern Gas Corridor pipeline system that transports natural gas from the bp-operated Shah Deniz gas field in the Azerbaijan sector of the Caspian Sea to markets in Europe such as Greece and Italy.

bp and Apollo will also look to partner on additional investment opportunities, including potential co-operation in both gas and low carbon energy assets, and infrastructure.

William Lin, bp EVP gas and low carbon energy: “We are very pleased to come together with Apollo on this key piece of Europe’s energy infrastructure. Importantly, while bringing in a new investor, this does not diminish bp’s role in a strategic asset for our Azerbaijan gas business. We see great potential in building innovative arrangements such as this and look forward to continuing to explore further opportunities with Apollo through growing this collaborative relationship.”

Skardon Baker, Apollo Partner: “We are pleased to partner with bp on an agreement that will provide our investors with long-term exposure to an industry-leading infrastructure asset with a stable cash flow profile, while allowing bp to meet its objectives of retaining control and executing on its capital efficiency strategy.”

Leslie Mapondera, Apollo Partner: “This innovative transaction structure is indicative of the types of bespoke solutions we can provide at Apollo, and we believe we are ideally positioned to execute onadditional strategic transactions with bp. Together, we see more potential opportunities, as we look to leverage Apollo’s long-term capital and sustainability & infrastructure investment expertise to partner with bp on its strategic plans, including energy transition opportunities.”

The proceeds from the transaction will contribute to bp’s 2024 divestment and other proceeds target of $2-3 billion, part of the company’s disciplined financial frame. The transaction is expected to close in 4Q 2024, subject to customary regulatory and partner approvals required.

The $550 million Ubeta upstream gas project, a joint venture between the Nigerian National Petroleum Company Limited (NNPC Ltd.) and TotalEnergies, has officially commenced operations.

The announcement was made by Olu Verheijen, the Special Adviser to the President on Energy, during the inaugural U.S.-Nigeria Strategic Energy Dialogue hosted by the U.S. State Department in Washington, D.C.

The Ubeta field, discovered in 1964 and located northwest of Port Harcourt, Rivers State, is expected to deliver 350 million standard cubic feet of gas per day when fully operational.

The project’s Final Investment Decision (FID) was signed in Abuja in June 2024, marking a major milestone in Nigeria’s energy development.

Verheijen highlighted that the gas project aligns with the energy reforms introduced by President Bola Tinubu in June 2023.

These reforms aim to boost energy security, attract foreign investments, and foster stronger collaboration with international partners, particularly the United States.

“The key reforms have improved the viability of the gas-to-power value chain in Nigeria,” she said.

Among the reforms mentioned were initiatives such as smart metering, which enhances cash flows in electricity distribution, and the payment of debts owed to investors.

Verheijen also revealed that President Tinubu had issued five new executive orders to offer fiscal incentives and streamline the development of gas infrastructure projects.

These measures are expected to unlock up to $2.5 billion in new investments in the oil and gas sector.

Geoffrey Pyatt, the U.S. Assistant Secretary for the Bureau of Energy Resources, praised the dialogue, stating it paves the way for strengthened U.S.-Nigeria collaboration in energy security and economic growth.

The Nigerian delegation was led by Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, with other senior officials in attendance.