Mubadala to hold Abu Dhabi’s 2% stake in BP

State investment fund Mubadala Development Co will control a 2 per cent stake in BP sold to Abu Dhabi in exchange for a holding in Abu Dhabi Company for Onshore Petroleum Operations (ADCO), a spokesman said on Monday.

The firm became the second Western oil major to renew a 40-year onshore concession in Abu Dhabi on Saturday after almost two years of negotiations to improve terms to help operate the United Arab Emirates’ biggest oilfields.

In exchange for the 10 per cent stake in ADCO, BP agreed to issue new ordinary shares to Abu Dhabi worth 1.76bn pounds ($2.2bn).

“The investment will sit within Mubadala and will be managed, as we have with previous investments made by Abu Dhabi, for the strategic benefit of the emirate,” Mubadala spokesman Brian Lott told Reuters.

When asked if Mubadala would seek representation on BP’s board, Lott said it was “too early to say”.

The ADCO concession, including the Bab, Bu Hasa, Shah and Asab fields, has total resources of between 20 billion-30 billion barrels of oil equivalent over the term of the concession. The fields produce 1.6 million barrels per day (bpd) and are expected to reach 1.8 million bpd from 2017.

Mubadala is currently being merged with fellow state investment fund International Petroleum Investment Company.