BP has struck a £1.9bn deal with Abu Dhabi to secure a share of its oil output for 40 years.
The agreement, sealed this weekend, will give the emirate a 2% stake in BP — making it one of the top 10 shareholders.
The alliance is the latest attempt by BP chief executive Bob Dudley to recharge the oil giant’s growth after years of spending and job cuts.
It will also provide a boost for Abu Dhabi, which has been forced into billions of dollars of budget cuts because of the low oil price. Brent crude closed on Friday at about $55 a barrel, less than half its level in the summer of 2014, just before the price cratered.
BP has agreed to issue 392m shares in exchange for a 10% stake in a group of onshore oil fields held by Adco, part of Abu Dhabi’s national oil company.
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The reservoirs make up most of the emirate’s output and will add 165,000 barrels a day to BP’s global production.
The British business lost $6.5bn last year because of the low crude price and costs related to the Gulf of Mexico rig disaster in 2010.
In the first nine months of this year, profits plunged by two-thirds. Debt has soared to $32bn because the FTSE 100 goliath has taken out loans to fund its dividend.
BP previously held a slice of Adco’s concessions but it lapsed in 2014. This weekend’s deal rekindles the partnership. BP has operated in Abu Dhabi for seven decades and holds a stake in its offshore fields.