Mubadala Development Co., an Abu Dhabi government investment firm, Tuesday said it purchased a 20%-stake in Royal Dutch Shell PLC's (RDSA) Algerian exploration and production contracts as part of plans to expand its global energy investments portfolio.
Under the farm-in agreement, Mubadala's fully-owned subsidiary Liwa Energy bought into Shell's existing production sharing contracts covering the Reggane Djebel Hirane and Zerafa concessions in the oil-rich north African state, the investment firm said in an emailed statement.
Mubadala didn't reveal the value of the transaction, which follows a 2005 strategic partnership deal signed between the Abu Dhabi firm and Shell.
Shell is presently carrying out an exploration and appraisal campaign in the areas jointly with Sonatrach, Algeria's state oil and gas company, Mubadala said.
Shell affiliates will hold a 60% interest in the concessions following the deal, with Sontrach holding a 25% stake and Liwa Energy the remaining 15%, Mubadala added.
The deal will help Abu Dhabi in "expanding and diversifying the emirate's economy through key investments both locally and globally," according to the statement.
Mubadala already holds interests in "several power stations and oil and gas projects" in Algeria, the company said in the statement.
In March 2007, Mubadala and Dubai Aluminium Co., or Dubal, signed an agreement with Sonatrach to develop the country's first aluminum smelter at Beni Saf.
Oil-rich Abu Dhabi is the largest of seven emirates that make up the United Arab Emirates, the Organization of Petroleum Exporting Countries' third largest crude oil producer.
Persian Gulf private and sovereign investors, which have access to easy liquidity after more than four years of soaring oil revenues, are spending billions of dollars on investments abroad and at home to broaden their investment portfolios and to gain access to technology, manpower and know-how.
Government investment firms such as Mubadala and Dubai International Capital have been at the forefront of such investments in recent years.