(MENAFN - Khaleej Times) The Abu Dhabi National Energy Company, or Taqa, has agreed to buy BP's oil and gas assets in the UK North Sea for over 1 billion.
The total consideration for the transaction is 1,058 million, plus certain potential contingent payments. The base consideration will be allocated 50 per cent to plant and machinery for tax purposes and has an effective date of January 1, 2012, except in respect of Devenick.
The transaction is being funded from existing operating cash flow and credit lines, Taqa said in a regulatory statement to the Abu Dhabi Securities Exchange, or ADX. The acquisition is expected to complete in the second quarter of 2013.
This investment secures thousands of jobs that Taqa supports in the North Sea, and reinforces the status of Taqa as the leading UAE investor in the UK. It follows a constructive dialogue between the oil and gas industry and the UK Treasury, that resulted in changes to the tax treatment of North Sea assets.
The acquisition consists of interests of 70 per cent in Harding, 37.03 per cent in Maclure and 88.7 per cent in Devenick in the Central North Sea.
Taqa will also increase its non-operated interests in the Brae area and associated transport infrastructure, including the Sage system, Forties-Brae and Forties-Braemar pipelines, according to Taqa's statement to the ADX.
The acquisition is expected to increase Taqa's net production by approximately 21,000 barrels of oil equivalent per day, and will add a second major development hub to its UK North Sea business. With this announcement, BP has now entered into agreements to sell assets with a value of around 37 billion since the beginning of 2010.
Welcoming the announcement, Prime Minister David Cameron said: "I'm delighted that following my recent visit to Abu Dhabi to spearhead greater commercial ties, Taqa have decided to invest in their North Sea operations. This is a vote of confidence in the UK economy and once again, highlights the North Sea's position as a global energy hub."
Taqa chairman Hamad Al Hurr Al Suwaidi, who is also the Chairman of the Abu Dhabi Department of Finance and Member of the Executive Council of Abu Dhabi, said: "This investment shows our commitment to the future of the North Sea. It is underpinned by the UK Government's commitment to long-term fiscal stability."