Eni and bp finalize an agreement to create a new independent joint venture in Angola

DGAP-News: BP plc / Keyword(s): Joint Venture
11.03.2022 / 19:55
The issuer is solely responsible for the content of this announcement.

Press release

March 11, 2022

Eni and bp finalize an agreement to create new independent joint venture in Angola

Luanda, Angola bp and Eni today confirmed that they have signed an agreement to form a new 50/50 independent company, Azule Energy, a bp and Eni company, through the combination of the two companies’ Angolan operations. The agreement follows the memorandum of understanding between the companies concluded in May 2021.

Azule Energy will be a new, independently managed international energy company with over 200,000 equivalent barrels per day (boe/d) of net oil and gas production and two billion equivalent barrels of net resources. It is expected to be Angola’s largest producer, holding stakes in 16 licenses and participating in the Angola LNG joint venture. Azule Energy will also take over Eni’s stake in Solenova, a solar company jointly owned with Sonangol.

Azule Energy will have a strong pipeline of new projects coming on stream over the next few years, including the new Agogo and PAJ oil projects in blocks 15/06 and 31 respectively. It will also develop the New Gas Consortium (NGC), the first non-associated gas project in the country, which will support the energy needs of Angola’s growing economy, its path to decarbonization and strengthen its role as a global player in the LNG.

bp and Eni share common goals for Azule Energy in achieving environmental and sustainability ambitions.

bp and Eni believe that combining their efforts with a long-term perspective will create more efficient operations and provide potential for increased investment, job creation and growth in Angola. Azule Energy will continue to develop the full potential of the country’s upstream sector, while positioning itself to seize new opportunities from the energy transition with the growing role of gas and renewables in its portfolio.

Bernard Looney, bp’s Managing Director, said: “Angola has long been important to bp’s operations and this innovative new venture underscores and enables our continued commitment to the country. Eni is a valuable partner to work with in the region. Azule Energy builds on our combined strengths and skills and, more importantly, is rooted in our shared values ​​and beliefs about what the future of energy should be. Ultimately, Azule Energy will be able to drive efficiencies and realize new opportunities through an expanded and truly exciting portfolio.

Claudio Descalzi, CEO of Eni, said: “The creation of Azule Energy is another step in advancing our strategic approach to accelerate growth through focused and financially independent businesses. By combining two world-class businesses into one stronger team, Azule Energy will leverage synergies and high-quality assets, boosting business in Angola and have one of the largest pipelines of production, development and exploration in sub-Saharan Africa. bp shares our values ​​and our approach to just transition and we are very happy to be partners in this initiative.”

Health, safety and environmental performance, project delivery and production efficiency will be priority areas for the new company. The joint venture will maintain access to world-class technologies and best practices through targeted areas of technical support from Eni and bp. Azule Energy will continue bp’s and Eni’s social investment commitments in Angola.

Since announcing the intention to form the joint venture in May 2021, bp and Eni have worked closely with the Angolan government and the creation of Azule Energy will be subject to all customary governmental and other approvals, with the aim of complete the transaction in the second half of 2022. Once created, Azule Energy will be equity accounted by bp and Eni. Hydrocarbon production and greenhouse gas emissions will continue to be reported on an equity basis.

Currently, Eni is the operator of blocks 15/06 Cabinda North, Cabinda Centro, 1/14, 28 and soon NGC. In addition, Eni has a stake in the non-operated blocks 0 (Cabinda), 3/05, 3/05A, 14, 14 K/A-IMI, 15 and in Angola LNG.

bp is the operator of blocks 18 and 31 offshore Angola and holds non-operated interests in blocks 15, 17, 20 and 29. bp also holds non-operated interests in NGC and Angola LNG.

More information:
bp press office, London: [email protected], +44 (0)7831 095541

Notes to Editors:

  • Eni and bp have signed an agreement to form a 50/50 joint venture that will combine the Angolan activities of the two companies.

  • The main assets included in this transaction are:

  • bp: bp is the operator of blocks 18 and 31 offshore Angola and holds non-operated interests in blocks 15, 17, 20 and 29. bp also holds non-operated interests in NGC and Angola LNG.

  • Eni: Eni is the operator of blocks 15/06, Cabinda North, Cabinda Centro, 1/14, 28 and soon NGC. In addition, Eni holds interests in the non-operated blocks 0 (Cabinda), 3/05, 3/05A, 14, 14 K/A-IMI, 15 and in Angola LNG.

  • Total boe production in Angola today is approximately 100,000 boe/d. After completion of this transaction, bp’s equity stake in Azule Energy’s production is expected to be approximately 100,000 boe/d.

  • Eni’s total production in Angola today is around 100,000 boe/d. After completion of this transaction, Eni’s equity stake in Azule Energy’s production is expected to be approximately 100,000 boe/d.

  • As part of this transaction, Azule Energy has an obligation to acquire Eni’s stake in Solenova.

  • This transaction constitutes a Class 2 transaction for bp under UK listing rules.

  • The value of bp’s gross assets subject to this transaction as of December 31, 2021 was approximately $6.8 billion and during the year ended December 31, 2021, the assets generated a pre-tax profit of about $1.1 billion.

  • The value of Eni’s gross assets that are the subject of this transaction as of December 31, 2021 was approximately $7.3 billion and during the year ended December 31, 2021, the assets generated a profit before taxes of about 0.5 billion dollars.

  • Under the terms of the agreement, bp and Eni will each receive a 50% stake in Azule Energy. Eni will receive a net adjustment of $338 million to be settled through Azule Energy, of which 62.5% payable on completion and 37.5% payable on the first anniversary of the closing of the transaction.

  • bp and Eni will each retain 50% of Azule Energy in accordance with the shareholding agreement. Azule Energy will be accounted for using the equity method by bp and Eni. Hydrocarbon production and GHG emissions will be reported on an equity basis.

Caution:

In order to utilize the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 (the “PSLRA”), bp provides the following disclaimer. This press release contains certain forward-looking statements – that is, statements relating to future and not past events and circumstances – which may relate to one or more of bp’s financial statements, results of operations and businesses and some of bp’s plans and objectives for these items. These statements are usually, but not always, identified by the use of words such as ‘will’, ‘expects’, ‘is expected’, ‘aims’, ‘should’, ‘may’, ‘aims’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’ or similar expressions. Actual results may differ from those expressed in these statements, depending on a variety of factors, including the risk factors set forth in our most recent Annual Report and Form 20-F under “Risk Factors” and in any of our public reports. the most recent. ‎
Our most recent Annual Report and Form 20-F and other filings for the period are available on our website at www.bp.comor may be obtained from the SEC by calling 1-800-SEC-0330 or on its website at ‎www.sec.gov.‎

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11.03.2022 Broadcast of a Corporate News, transmitted by the DGAP – a service of EQS Group AG.
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