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Abu Dhabi reluctant to invest in BP: report

Abu Dhabi is reluctant to invest in British Petroleum(BP), a report said, only days after the British company's chief was thought to have sought investment from sovereign wealth funds on a visit to the Gulf state.

business Updated: Jul 11, 2010 19:18 IST

Abu Dhabi is reluctant to invest in British Petroleum(BP), a report said, only days after the British company's chief was thought to have sought investment from sovereign wealth funds on a visit to the Gulf state.

Citing sources, the Middle East Economic Survey said it "understands that Abu Dhabi has signaled a reluctance to buy into BP," in its latest edition to be published tomorrow.

"Sources close to Abu Dhabi investment funds said that they are already in court over a Citigroup investment and that the move would be too politically charged and there are too many unknowns," the MEES newsletter said.

Abu Dhabi Investment Authority(ADIA) became one of Citigroup's biggest investors in 2007 with a USD 7.5-billion cash injection, but The National newspaper reported in December that ADIA filed a suit accusing the US bank of fraud.

Investment funds "may be willing to monetize some of BP's holdings in the region, provided that they do not run into problems with the US Department of Justice," which has requested it be kept informed of BP asset disposals and "other large transactions," MEES said.

Tony Hayward, BP's chief executive, was in oil-rich Abu Dhabi on Wednesday as speculation swirled that the energy British giant is seeking support from sovereign wealth funds following the Gulf of Mexico oil disaster.

Dow Jones Newswires said that Hayward held talks with Abu Dhabi's powerful crown prince, Sheikh Mohammad bin Zayed al-Nahayan and discussed the possibility of the emirate taking a 10-per cent equity stake in BP.

MEES said Hayward also met with officials from ADIA and the Abu Dhabi National Oil Company during his visit.

ADIA is considered the world's largest sovereign wealth fund with assets of more than USD 600 billion.