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The energy industry’s most ambitious new dealmaker is reshuffling its leadership team after its first year of operations, having attempted more than $40bn of acquisitions.
XRG was created last November by Abu Dhabi’s national oil company Adnoc as a flagship $80bn vehicle to buy up international gas, chemicals and low-carbon energy businesses.
Its board features Abu Dhabi investment minister Mohamed Alsuwaidi, as well as Jon Gray, president of private equity group Blackstone, and former BP chief Bernard Looney.
XRG is now revamping its executive team by appointing former Goldman Sachs banker Nameer Siddiqui as chief investment officer. Siddiqui was most recently senior vice-president for business transformation at Phillips 66, where he helped defend the US refiner against the activist investor Elliott Management. One person close to XRG noted Siddiqui’s experience of the US, which is a focus for his new employer.
Klaus Froehlich, who led the deals team for both XRG and Adnoc, will step back from his role at the former, while XRG chief operating officer Khaled Salmeen will leave the company in January. He will not be replaced, said the person close to the company, with his responsibilities split between the rest team under executive chair Sultan al-Jaber.
XRG declined to comment on the moves.
In its first year of operations XRG created a gas joint venture with BP in Egypt, bought stakes in liquefied natural gas projects in Texas and Mozambique, and a gas pipeline in Azerbaijan, according to data from Dealogic.
It also inherited two large chemicals deals from its parent: an agreement with Austria’s OMV that created the $60bn Borouge International and the €14.7bn takeover of Germany’s Covestro.
But it stumbled over a $19bn bid for Australian oil and gas group Santos, ultimately withdrawing its offer in September. A Texas low-carbon hydrogen project in which it has a 35 per cent stake is also on hold while operator ExxonMobil waits market conditions to improve.
XRG is set to broaden its business with a plan to spend between $10bn and $30bn on infrastructure investment over five years. The person close to the company suggested XRG’s enterprise value had risen to $150bn at the end of its first 12 months.
It may also look to return for Santos, which would give it a strong supply of LNG to the Asian market. “Santos helps achieve our strategic imperatives. It will continue to be on the agenda,” said a second person close to the company. But a third person cautioned that XRG would not return before a further fall in Santos’ stock market valuation. The Australian company’s shares have slid roughly 13 per cent since XRG dropped its offer.
The EU this week approved the Covestro takeover. Progress had been slow after Brussels opened a probe into whether the deal had benefited unfairly from state aid from the United Arab Emirates. The EU cleared the deal on condition that Abu Dhabi removes a guarantee of unlimited support and agrees to share some of Covestro’s sustainability technology with rivals.