BP Bags $1B for 25 Pct Stake in BP TANAP

In a statement posted on its website on Friday, BP announced that it and Apollo have reached agreements for Apollo-managed funds to purchase a 25 percent non-controlling stake in BP Pipelines (TANAP) Ltd.

Under the agreement, Apollo funds will purchase the non-controlling shareholding in BP TANAP for a consideration of approximately $1.0 billion, the statement noted, adding that proceeds arising from this transaction will contribute towards BP’s program for $20 billion in divestment and other proceeds.  

The transaction is anticipated to close in the second quarter of this year, subject to regulatory and TANAP shareholders approvals, the statement highlighted.

Rigzone asked BP if it plans to sell more BP Pipelines (TANAP) Ltd stake. A BP spokesperson declined to comment.

“While the deal enables BP to monetize its interest in TANAP, BP will remain the controlling shareholder of BP TANAP and retain a long-term commercial and strategic interest, including governance rights, in the pipeline - a vital part of the gas value chain for the BP -operated Shah Deniz gas field in Azerbaijan,” BP said in the statement posted on its site.

The company added that it and Apollo continue to explore opportunities for further cooperation, including in infrastructure, gas, and low carbon energy assets.

“We are pleased to extend our partnership with Apollo and to deepen our partnership in this key piece of energy infrastructure for Europe,” William Lin, BP Executive Vice President Gas & Low Carbon Energy, said in the statement.

“This unlocks capital from our global portfolio while retaining our role in this strategic asset for bringing Azerbaijan gas to Europe. BP and Apollo will continue to explore further strategic cooperation and mutually beneficial opportunities,” he added.

Skardon Baker, Apollo Partner, said in the release, “we see significant potential with our scaled, long-term capital to partner with BP, in alignment with their strategic objectives”.

“We are pleased by the highly successful partnership to date,” Baker added.

Leslie Mapondera, also an Apollo partner, said in the release, “we value the opportunity for our funds to further partner with BP on this critical European infrastructure asset”.

“This investment underscores the relevance of Apollo’s capital for high quality scaled infrastructure opportunities in Europe,” Mapondera added.

BP Pipelines (TANAP) Ltd is a BP subsidiary that holds BP’s 12 percent interest in TANAP, BP pointed out in the statement. TANAP is the owner and operator of the pipeline that carries natural gas from Azerbaijan across Türkiye, the statement outlined.

TANAP runs approximately 1,800 km across Türkiye and is the central section of the SGC pipeline system, the statement highlighted, adding that the SGC transports gas from the BP-operated Shah Deniz gas field in the Azerbaijan sector of the Caspian Sea to markets in Europe, including Italy and Greece.

In its statement, BP pointed out that, in November 2024, it and Apollo completed an agreement for Apollo to partner with BP on TAP, “the final leg of the SGC”.

In a statement posted on its site in September last year, BP announced a deal for Apollo-managed funds to purchase a non-controlling stake in BP Pipelines TAP Limited, “the BP subsidiary that holds a 20 percent share in Trans Adriatic Pipeline AG (TAP), in a transaction valued at approximately $1 billion”.

“Upon completion, BP will remain the controlling shareholder of BP Pipelines TAP Limited,” BP said in that statement.

In this statement, Lin said, “we are very pleased to come together with Apollo on this key piece of Europe’s energy infrastructure”.

“Importantly, while bringing in a new investor, this does not diminish BP’s role in a strategic asset for our Azerbaijan gas business. We see great potential in building innovative arrangements such as this and look forward to continuing to explore further opportunities with Apollo through growing this collaborative relationship,” he added.

Baker said in the release, “we are pleased to partner with bp on an agreement that will provide our investors with long-term exposure to an industry-leading infrastructure asset with a stable cash flow profile, while allowing BP to meet its objectives of retaining control and executing on its capital efficiency strategy”.

Mapondera said in this release, “this innovative transaction structure is indicative of the types of bespoke solutions we can provide at Apollo, and we believe we are ideally positioned to execute on additional strategic transactions with BP”.

“Together, we see more potential opportunities, as we look to leverage Apollo’s long-term capital and sustainability and infrastructure investment expertise to partner with BP on its strategic plans, including energy transition opportunities,” Mapondera continued.

In a statement posted on its website on February 26, BP announced a “fundamentally reset strategy”. This strategy will see BP grow its upstream oil and gas business, focus its downstream business, and invest with increasing discipline into the transition, the company noted in that statement.

In a separate statement posted on its site on the same day, BP announced that it was carrying out a strategic review of its Castrol business “with the intention of accelerating Castrol’s next phase of value delivery”. 

“The strategic review of Castrol will consider all options with a focus on value creation. Proceeds from any potential transaction that may arise as a result of the review will be allocated to strengthening BP’s balance sheet,” BP said in that statement.

In another statement posted on the BP site on February 6, BP Europa SE announced its intention to market its Ruhr Oel GmbH - BP Gelsenkirchen operation in Germany for potential sale. Its assets include the BP refinery in Gelsenkirchen and DHC Solvent Chemie GmbH in Mülheim an der Ruhr, the company highlighted in the statement.

“The marketing process for a suitable buyer will begin immediately with sales agreements targeted for 2025,” the company noted in the statement.

“Assuming this is successful, timing for the completion of the sale and transfer of the company to a new owner will be subject to regulatory and governmental approvals. During the sales process, the refinery will continue to operate as usual,” it added.

In a statement posted on its site last week, Apollo announced that funds managed by Apollo affiliates have agreed to acquire a majority stake in OEG Energy Group from funds managed by the Power Opportunities strategy of Oaktree Capital Management LP and other investors.

The transaction implies a headline valuation of more than $1 billion for OEG, and Oaktree and others will retain a minority equity interest in the company, Apollo said in that statement, which described OEG as a leading offshore energy solutions business.

To contact the author, email andreas.exarheas@rigzone.com