The energy sector’s bold new player, XRG, is making significant changes to its leadership after a busy first year, during which it pursued over $40 billion in potential acquisitions.
Founded just last November by Abu Dhabi’s national oil company, Adnoc, XRG aims to position itself as a major $80 billion investment vehicle focused on acquiring international gas, chemicals, and low-carbon energy firms.
The board includes notable figures such as Abu Dhabi’s Investment Minister, Mohamed Alsuwaidi, Jon Gray, president of Blackstone, and former BP CEO Bernard Looney.
In a strategic revamp, XRG has appointed Nameer Siddiqui, a former Goldman Sachs banker, as its chief investment officer. Siddiqui previously held a senior position at Phillips 66, where he played a critical role in warding off pressure from activist investors. His experience in the U.S. market is seen as valuable to XRG’s objectives.
Klaus Froehlich, who has been leading the deals team for both organizations, will step back from his role, while COO Khaled Salmeen is set to leave the company in January. His responsibilities will be redistributed among the existing team instead of appointing a replacement.
XRG has not commented on these changes.
In its inaugural year, XRG formed a gas venture with BP in Egypt and acquired interests in liquefied natural gas projects in Texas and Mozambique, as well as a gas pipeline in Azerbaijan. It also took over two major chemical deals from Adnoc: a partnership with OMV, leading to the creation of the $60 billion Borouge International, and a €14.7 billion acquisition of Covestro in Germany.
However, the company faced challenges, including a $19 billion proposal for the Australian oil and gas company Santos, which it ultimately withdrew. Additionally, a low-carbon hydrogen project in Texas, where XRG holds a 35% stake, is currently on hold as the operator, ExxonMobil, waits for market conditions to improve.
Looking ahead, XRG has plans to expand its operations by investing between $10 billion and $30 billion in infrastructure over the next five years. Sources suggest that XRG’s enterprise value has climbed to approximately $150 billion after its first year in business.
There is also talk of revisiting its bid for Santos, which could significantly enhance XRG’s liquefied natural gas supply to Asian markets. A source remarked, “Santos aligns with our strategic goals. It remains on our radar.” However, another insider warned that XRG might hold off on any renewed bid until Santos’ market value declines further, noting that the company’s shares have dropped about 13% since XRG withdrew its offer.
Recently, the EU approved XRG’s takeover of Covestro, following a lengthy review process. The deal was initially delayed as European regulators investigated potential state aid from the UAE, but it received approval contingent on certain conditions, including the removal of unlimited support guarantees and sharing some sustainability technology with competitors.