Investing giants BlackRock and KKR on Sunday signed a $4 billion agreement with Abu Dhabi’s National Oil Company (ADNOC) to become the first institutional investors joining forces with a national oil producer in the Middle East.
The deal represents a landmark partnership in midstream pipeline infrastructure development for ADNOC. It’s also the latest step in its drive to diversify revenue sources and bring private capital and more commercial management into the company.
The agreement forms a new entity called ADNOC Oil Pipelines, which will “lease ADNOC’s interest in 18 pipelines, transporting stabilized crude oil and condensate across ADNOC’s offshore and onshore upstream concessions,” for 23 years, according to the company’s press release Sunday.
ADNOC will retain a 60 percent majority stake, with BlackRock and KKR collectively holding a 40 percent interest in the consortium, the company said.
BlackRock CEO Larry Fink described what he saw as Abu Dhabi’s push to attract more foreign capital and its potential in global financial markets.
“Abu Dhabi wanted to play in the world stage… and it was not us pushing them, if anything they were already there in terms of what type of transparency is necessary to attract foreign investors,” he told CNBC’s Hadley Gamble on Sunday. “For a transaction like this, it came very rapidly.”