The Abu Dhabi government has become a major investor in BP in a deal that gives the FTSE-100 giant access to some of the world's biggest oil reserves.

BP has struck a deal to take a 10pc stake in one of the largest oil fields in the Middle East. In return it has handed over shares worth around $2.2bn (Ł1.8bn) to Abu Dhabi.

The agreement gives the Abu Dhabi Government a 2pc share of the British oil business, becoming one of its largest shareholders. BP meanwhile gains a stake in the Abu Dhabi Company for Onshore Petroleum Operations and access to onshore oil fields that are expected to produce the equivalent of 20 to 30 billion barrels of oil in the 40 year period the deal is valid for.

BP, which has had a presence in the Middle Eastern country for 77 years and a relationship with the company operating the oil fields for four decades, will collect 165,000 barrels of oil a day following the sign-off. It will increase BP’s total share of oil and gas production from Abu Dhabi to 260,000 barrels of oil a day in 2017 up from 95,000.

BP boss Bob Dudley signed off on the deal with Abu Dhabi Credit: AP

The ADCO concession, which is one of the largest in the region and includes the Bab, Bu Hasa, Shah and Asab oil fields, is expected to have produced an average of 1.66m barrels of oil per day in 2016.

It comes as oil prices have started to inch up after a two year slump following a promise by major producers to reduce their output, including the United Arab Emirates.

Bob Dudley, group chief executive of BP, said the deal cements the company’s relationship with Abu Dhabi and welcomed the country as an “important investor in BP”.

“This agreement will provide BP with long-term access to significant and competitive resources,” said Mr Dudley. “We will bring our people, cutting-edge technology and experience of managing mature giant fields around the world to help maximise recovery from these assets.”

The deal replaces one that expired in 2014 that gave BP a 9.5pc stake in the state-owned Abu Dhabi National Oil Company, of which ADCO is a subsidiary. ADNOC is looking for further overseas partners to fill the 40pc stake it reserves for international oil companies.

In addition to BP’s share, France’s Total SA also owns a 10pc stake in the concession, while Japan’s Index Corp has a 5pc share and South Korea’s GS Energy 3pc.

Brian Gilvary, chief financial officer of BP, said the deal will help the company boost its growth in the long term.

“It is consistent with our aim of delivering competitive returns from a portfolio with a balance of resource types, geographies and resilient pricing models,” said Mr Gilvary. “The lower cost characteristics of the already-producing conventional onshore oil development will be accretive to earnings and cash flow, while providing BP with another building block of long term growth.”