Abu Dhabi eyes BP stake purchase

By Andrew England in Abu Dhabi

Published: July 13 2010 14:53 | Last updated: July 13 2010 14:53

Sheikh Mohammed bin Zayed Al-Nahyan, Abu Dhabi’s powerful crown prince, said on Tuesday that the wealthy emirate was still considering whether to invest in BP.

“We are still thinking about it,” he was quoted as saying by Bloomberg after being asked about buying a stake in the troubled oil company. “We are looking across the board. We have been partners with BP for years.”

Sheikh Mohammed’s comments come just under a week after Tony Hayward, BP’s chief executive, made a brief visit to Abu Dhabi that included a meeting with the crown prince.

There has been much speculation that BP has been looking to investors in the Middle East to raise funds and help ward off any hostile takeover bids after its share price plummeted following the Gulf of Mexico oil spill.

BP on Monday said it had installed a new cap to the leaking well head. It reiterated hopes that by the end of the week its leaking Macondo well could be shut off, or all the oil could be captured using the new 40-tonne containment device. BP said on Tuesday that it would begin pressure tests on the new device at midday local time.

BP shares, which halved in value in the weeks following April’s explosion in the Gulf of Mexico, rose 16¾p or 4.2 per cent to 415.7p in London.

Abu Dhabi, capital of the United Arab Emirates, is home to a broad range of state investment vehicles, including the Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds, and a number of government-controlled companies that invest in energy related assets.

It also boasts about 95 per cent of the hydrocarbons resources of UAE, which is one of the few Gulf states in which international oil companies are able to get fully involved in upstream exploration and production operations.

BP describes the UAE as the centre of the company’s Middle East and Pakistan operations and the company’s relationship with the Gulf state goes back to the 1930s.

Sheikh Mohammed, who is a half-brother to Abu Dhabi’s ruler and the UAE’s president, is considered the driving force behind the massive development taking place in Abu Dhabi.

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Jul 13, 2010