Canada Pension Plan Investment Board (CPP Investments) is acquiring a 49% stake in Aera Energy, a $4bn (€3.7bn) US energy producer recently acquired by infrastructure manager IKAV.
Last September, IKAV agreed to buy Aera Energy through two separate deals with the California energy producer’s joint owners ExxonMobil and Shell.
At the time, Shell said it expected to receive around $2bn for its 51.8% interest in Aera Energy once the transaction was completed in the fourth quarter of 2022.
Aera Energy, formed in June 1997, is California’s second-largest oil and gas producer and accounts for nearly 25% of the state’s production. In 2021, Aera Energy produced about 90,000 barrels of oil and 23m cubic feet of natural gas per day.
CPP Investments said the partnership with IKAV will help accelerate Aera Energy’s ability to further reduce carbon intensity and support the development of carbon capture and storage and other emerging technologies.
Bruce Hogg, managing director and head of sustainable energies at CPP Investments, said: “Our investment in Aera Energy is consistent with a number of investments we’ve made which will help California transition to secure, green energy supplies while at the same time will deliver long-term risk-adjusted returns for the CPP fund.
“CPP Investments believes that enabling emissions reduction and business transformation in the energy sector can drive strong returns for long-term investors as part of the whole economy transition, and partnering with a like-minded investor like IKAV presents an excellent opportunity to put that decarbonisation investment approach into action.”
Constantin von Wasserschleben, chairman of IKAV, said: “We are aligned with CPP Investments in our commitment to achieving a smooth and sustainable transition to renewable energy.
“By delivering an energy solution at Aera that ties renewable growth with the safe and responsible operation of conventional energy assets, we are pursuing the right steps to balance California’s energy demand with its future climate goals.”
Erik Bartsch, Aera Energy president and CEO, said: “Aera will continue to power the California economy and live our values of exceptional care for people and the environment. We also remain committed to the principles that make us an employer of choice and a valued partner in the communities where we live and work.”
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