Brooge Energy’s suitor eyes its Fujairah crude, oil products storage capacity

Dubai's Gulf Navigation announced board approval of its planned acquisition of Brooge Energy, noting that Brooge intends to double its existing 1 million cubic meters of storage space for oil products and crude oil at Fujairah on the UAE's east coast, including 6.3 million barrels of crude.

The board approved issuing Dirhams 448.5 million ($122 million) in shares to pay for the acquisition, along with an unspecified cash payment and mandatory convertible bond, Gulf Navigation said in a Sept. 25 statement. The company plans to seek shareholder approval for the acquisition at a meeting likely in late October, a spokesperson said. He declined to say which of Brooge Energy's assets are part of the takeover. Brooge Energy "will continue to work collaboratively with Gulfnav and their respective advisers to finalize the definitive sale and purchase agreement, including completing the necessary due diligence processes," it said in a Sept. 25 filing to the SEC.

Gulf Navigation trades on the Dubai Financial Market while Brooge Energy is listed on the Nasdaq in the US, where the company told the SEC on Sept. 6 that its board had discussed Gulf Navigation's "revised offer" that was originally submitted in October 2023. It added in the Sept. 25 filing that its latest auditor Pipara is unable to complete the audit and documents for Brooge Energy's overdue 2023 annual report under form 20-F, and as of Sept. 20 has appointed Bansal as its new external auditor for the fiscal year 2023 ended Dec. 31. Brooge Energy received a non-compliance letter from Nasdaq where its shares trade on June 6, after failing to file its 2023 financial statements by April 30.

Gulf Navigation already operates out of Fujairah, the UAE emirate of Sharjah and Saudi Arabia, and has a fleet including four tankers for oil and chemicals, one well stimulation ship, one livestock carrier and an offshore fleet of four ships sailing under the UAE flag, according to the company's website.

Brooge Energy has discussed several projects over the years. In 2022, it said it signed a preliminary lease agreement for 150,000 square meters at Abu Dhabi's Khalifa Industrial Zone, with plans to produce up to 300,000 metric tons a year of green ammonia. That followed a September 2021 plan for a third expansion of its Fujairah storage facilities to potentially add up to 3.5 million cu m of capacity. The phase 3 expansion project was also to include a 25,000 b/d modular refinery and a larger 180,000 b/d conventional refinery, but the company has given no recent updates. Fujairah has three refineries owned by Vitol, Montfort Trading and Ecomar Energy Solutions.