APICORP concludes another successful divestiture

Arab Petroleum Investments Corporation (APICORP), the multilateral development bank of the Organization of Arab Petroleum Exporting Countries (OAPEC), today announced the sale of its 12.5% stake in the Bahrain National Gas Company (BANAGAS) to Kuwait-based Boubyan Petrochemical Company, K.S.C. (Boubyan). The divestment was recently approved by APICORP’s Board of Directors. The government of UAE has a 17 % stake in APICORP.

Ahmad Bin Hamad Al-Nuaimi, Chief Executive and General Manager of APICORP, said: “Since we invested in BANAGAS 33 years ago, we have seen the company evolve into a highly successful leading local, regional and international company. As a result of its continued success, we feel it is appropriate to monetize our share in BANAGAS by transferring it to a strategic GCC-based investor so that we can advance our plans to initiate and develop other oil and gas projects.”

BANAGAS was founded by the Government of Bahrain currently represented by the National Oil and Gas Holding Company (nogaholding), Chevron and APICORP in 1978 with stakes of 75%, 12.5% and 12.5% respectively. The company’s principal business comprises of extracting and marketing propane, butane and naphtha, by processing associated gas from Bahrain’s oil field, for the local, regional and international markets. BANAGAS is estimated to produce 4720 b/d of Naphtha, 1230 b/d of Butane and 1310 b/d of Propane. With over 400 employees and a large volume of exports, BANAGAS plays an important role in the Bahrain national economy. 

“In order to ensure a market-driven sale value for our shareholders, APICORP implemented a highly successful three stage auction process in which a high number of regional and international companies participated. In the end, Boubyan, a strategic regional company specialized in chemicals and petrochemicals from Kuwait, won with the most competitive bid.” said Al-Nuaimi. 

Boubyan was established in February 1995 with the prime objective of acquiring a 10% equity stake in EQUATE Petrochemical Company, the largest petrochemical complex in Kuwait. Today, Boubyan has an impressive investment portfolio in Kuwait, Oman and Saudi Arabia as well as across the rest of the world. BANAGAS is Boubyan’s first direct investment in Bahrain. Boubyan was listed on the Kuwait Stock Exchange in 1997 and its shares continue to outperform the Kuwait Stock Exchange Index. 

Dabbous Mubarak Al-Dabbous, Deputy Chairman of Boubyan said: “This investment represents the reinforcement of Boubyan’s commitment to its strategy of making strategic direct investments in successful ventures in the chemical, petrochemical, and oil and gas sectors, especially in the hydrocarbon-rich GCC region.”

Commenting on the sale of APICORP shares, Dr. Shaikh Mohamed Bin Khalifa Al Khalifa, General Manager of BANAGAS said that “we have enjoyed working with APICORP as a strategic partner for the last 33 years.  We very much appreciate and commend the strong business relationship and teamwork spirit that we have had with APICORP top management and Board of Directors and wish them every success in implementing their five-year investment strategy. We also welcome Boubyan Petrochemical as a new strategic partner and look forward to working with them towards achieving BANAGAS’s future goals and objectives”.

Al-Nuaimi said: “APICORP has had a strong presence in Bahrain since first investing in BANAGAS in 1978. Over the years, our commitment to the Kingdom of Bahrain has increased in areas of project finance and financial advisory services for oil and gas projects.  More recently in 2006, APICORP established a Bahrain banking unit to support the growth and diversification of APICORP’s sources of funding. We fully expect APICORP to continue to assist in developing additional oil and gas projects important to the Kingdom of Bahrain, either through equity, project finance, or financial advisory services.”

APICORP’s strong financial position received a boost recently when an Extraordinary General Assembly meeting held in Cairo, in May this year, unanimously decided to increase its subscribed capital by 173% from US$ 550 million to US$ 1,500 million. The General Assembly also resolved to double its authorized capital from US$ 1.2 billion to US$ 2.4 billion. APICORP’s paid-up capital also increased 36% from US$ 550 million to US$ 750 million.

Since inception in 1975, APICORP has played a vital role in fostering the development of the Arab energy industry. Over the last 35 years, APICORP has made equity investments in a total of 22 oil and gas joint venture projects worth in excess of $13 billion. At the same time, APICORP has participated in direct and syndicated energy finance transactions worth in excess of US$126 billion.  APICORP‘s aggregate commitments in these transactions, both in equity and debt, are valued in excess of US$11 billion.