The United Arab Emirates’ main oil company agreed to buy a 10% stake in a natural gas project in Mozambique, its second major deal this week as it seeks to expand the business globally.
Abu Dhabi National Oil Co. will purchase the stake in the Area 4 concession from Galp Energia SGPS SA, it said in a statement Wednesday. Galp will receive $650 million, and further contingent payments of as much as $500 million when two planned development phases go ahead, the Portugese company said in a separate statement.
The agreement gives Adnoc a share of LNG supply, a fuel that it’s betting on for future growth. The company is also scouring the world for deals, including the takeover of German chemical company Covestro AG and the merger of one of its units with a subsidiary of Austria’s OMV AG to create a $30 billion petrochemical giant. That push coincides with Saudi Aramco’s efforts to boost its global presence, after agreeing to buy an LNG company in Australia.
In Mozambique, Adnoc will get a share in the 3.5 million-ton-a-year Coral South development LNG export project that is currently in operation. A proposed expansion called Coral North could produce the same amount of fuel from a floating export vessel. Another project planned to be based onshore called Rovuma is projected to have capacity to produce 18 million tons of LNG a year.
© Supplied by AdnocIt follows Adnoc’s first acquisition in the US earlier this week when it picked up a share in NextDecade Corp.’s LNG project in Texas, along with supply from a planned expansion of the plant.
The deal into Mozambique — where attacks by militant groups linked with Islamic State have ramped up near the project site — is also the latest example of the UAE’s move to boost its influence in Africa. Earlier this year, the country agreed to invest $35 billion in Egypt, potentially saving the economy.
In 2022, the UAE pledged $52.8 billion in foreign direct investments in Africa, when it first topped FDI rankings, according to data from fDi Markets. That figure fell to $44.5 billion in 2023 — still nearly twice that of Beijing, which came in second.
Oil Wealth
The UAE, of which Abu Dhabi is the capital, is using its oil wealth to turn Adnoc into a global energy business. The country, and its Middle East neighbors including Saudi Arabia and Qatar, are also investing billions of dollars on gas — seen as an important bridge fuel in the energy transition. The UAE aims to be self-sufficient in the fuel by 2030 as it explores at home and adds stakes in fields from Azerbaijan to Egypt.
“We’ve made it very clear that we’re interested in key sectors when it comes to low carbon solutions, renewables, natural gas and chemicals,” Musabbeh Al Kaabi, Adnoc’s executive director for international growth, said in an interview Monday after the company announced the US deal. “We’re executing on our strategy and our strategy is clear. It’s a milestone with hopefully more to come.”
Adnoc will take Galp’s place in the Rovuma and Coral projects. The company will join Eni SpA, Exxon Mobil Corp., China National Petroleum Corp., Korea Gas Corp. and Mozambique’s state producer Empresa Nacional de Hidrocarbonetos E.P.
Mozambique’s Area 4 includes Eni’s $7 billion floating Coral South Project that began shipping LNG in 2022 and a similar planned offshore production facility. Exxon said earlier this month that it expects a final investment decision for the onshore Rovuma project by the end of 2025.