Sunday, May 19, 2013
(This story was originally published Friday.)
By Summer Said
ABU DHABI--Abu Dhabi's Supreme Petroleum Council has rejected a proposal by its state-controlled oil company to extend by a year a shared license to operate some of its largest onshore oil fields, leaving it with little time to form a new deal with several international companies, people familiar with the matter said Friday.
"If the Supreme Council had approved the extension, Adnoc [Abu Dhabi National Oil Co.] would have had enough time to make its selection," one of the people told The Wall Street Journal. "But now there is a big chance that the concession will expire without Adnoc making a selection," especially as the firm is keen to bring in new players, the person said.
The 75-year-old concession, which expires in January, produces more than half the United Arab Emirates' crude production of 2.6 million barrels a day. It is one of the few major oil-producing areas in the Persian Gulf where international companies hold a stake.
State-owned Adnoc holds a 60% stake in Abu Dhabi Co. for Onshore Oil Operations, or Adco, which operates the concession. The remaining 40% is shared between BP PLC (BP), Exxon Mobil Corp. (XOM), Royal Dutch Shell PLC (RDSB.LN), Total SA (TOT) and Partex Oil & Gas.
The emirate has previously missed deadlines to renew important oil and gas concessions. In 2008, Adnoc saw its Abu Dhabi Gas Industries Co., or Gasco, concession to operate onshore gas fields expire without reaching a decision on renewal. The Gasco concession was eventually renewed in April 2009 on a 20-year contract backdated to start in 2008.
Adnoc in March sent out invitations to pre-qualified international firms to bid for the oil fields and gave them a period of six months to submit their proposals.
It trimmed the list of companies following the pre-qualification process, which started last June when Adnoc sent letters to up to 20 companies, including all existing partners except for Partex, to gauge interest in operating the fields.
Besides the four major existing partners, Adnoc also prequalified U.S.-based firm Occidental Petroleum Corp. (OXY), China National Petroleum Corp., or CNPC, Japan's Inpex Corp. (1605.TO), Korea National Oil Corp., or KNOC, Italy's Eni SpA (E), Norway's Statoil ASA (STO) and Russia's OAO Rosneft (ROSN.RS), two people familiar with the process said.
The Adco concession, which covers six main deposits, is the largest in the country with the capacity to produce about 1.5 million barrels daily. The UAE, which includes Abu Dhabi, plans to increase its output capacity to 3.5 million barrels a day by 2017, from its current estimated maximum output capacity of around 2.85 million barrels a day.
Write to Summer Said at summer.said@dowjones.com
(END) Dow Jones Newswires
19-05-13 0348GMT
