Canada Pension Plan Investment Board (CPP Investments) has agreed to acquire a 49% stake in California-based energy producer Aera Energy from international asset management group IKAV.
The acquisition was announced in September 2022. The transaction is set to “accelerate Aera Energy’s ability to further reduce carbon intensity and support the development of carbon capture and storage and other emerging technologies”.
Aera was created as a joint venture between Shell and ExxonMobil. It is California’s second-largest oil and gas producer, accounting for nearly 25% of the state’s production.
Constantin von Wasserschleben, chair 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."
Bruce Hogg, managing director and head of sustainable energies at CPP Investments, added: “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 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 decarbonization investment approach into action.”