Wednesday, Feb 27, 2013

(This story was originally published Tuesday.)

By Summer Said

DUBAI--Abu Dhabi National Oil Co., or Adnoc, has proposed to extend the agreement on some of its largest onshore oilfields to firm a new deal with international oil companies, people familiar with the matter said Tuesday.

The agreement was due to expire in January 2014 but Adnoc has proposed a one year extension. Adnoc holds a 60% controlling stake in Abu Dhabi Co. for Onshore Oil Operations, or Adco, which operates the 75-year old concession, while the remaining 40% is owned by BP PLC (BP.LN), Exxon Mobil Corp. (XOM), Royal Dutch Shell PLC (RDSB.LN), Total SA (TOT) and Partex Oil & Gas.

"Abu Dhabi saw that the time left before the current concession expires is not enough to firm a new deal, especially that more companies are interested to participate and Adnoc wants a new structure," the person told Dow Jones Newswires, but declined to give details on the new structure.

The new proposal by Adnoc will have to be approved by the emirate's highest oil authority, the Supreme Petroleum Council, "but the council is likely to agree on it," the person added.

An oil official from the United Arab Emirates said the council is expected the new proposal soon.

Adco has the rights for six main deposits, making it the largest concession with capacity to produce about 1.5 million barrels per day.

Several oil majors including Exxon, Shell. Total and China National Petroleum Corp. received invitations last year to bid for the first renewal of the concession but BP was excluded from the original invitation list. The U.K. energy giant was invited back to the race late last year, according to a U.A.E. oil official.

The U.A.E., which currently produces around 2.6 million barrels per day of crude oil and is a member of the Organization of the Petroleum Exporting Countries, plans to increase its output capacity to 3.5 million barrels per day by 2017 from its current estimated output capacity of around 2.85 million barrels per day through concessions.

Abu Dhabi is the home of more than 90% of crude in the U.A.E., one of the few Middle East countries that allow foreign companies to explore for and produce oil within its borders. The Gulf state has four major concessions and may allow more foreign companies, such as from South Korea and China, to be partners in more marginal oil fields.

Write to Summer Said at summer.said@dowjones.com

(END) Dow Jones Newswires

27-02-13 0346GMT