Dubai to control its offshore oilfields

07 Aug 2006

Dubai: The Dubai government has created a new entity to take control of its offshore oil resources from Dubai Petroleum Company (DPC), which is wholly-owned by US oil giant ConocoPhillips.

The government and DPC have signed a pact that will change the 45-year old operating agreements for Dubai offshore oilfields from April 2 next year.

Dubai Petroleum Establishment (DPE), the new entity owned by the government of Dubai, will be responsible for operating the oilfields and for all future business related to oil and gas production in Dubai.

The offshore oilfields are Fateh, Southwest Fateh, Rashid and Falah. No output data was available for these assets.

Oil services firm Petrofac will take over responsibility for well and facilities management on behalf of DPE from April 2, 2007.

"DPC will end its role as operator, marking the end of Dubai's first offshore oil concession and the beginning of a new phase in which the emirate of Dubai will directly control its offshore oil resources," a joint statement said.

DPC is part of the DPC-Dubai Marine Areas Limited (Duma) consortium involving interests from Total of France, Repsol of Spain, RWE Dea AG, a subsidiary of Germany's RWE AG and Wintershall AG, a subsidiary of German chemicals group BASF.

Abdullah Abdul Karim, a Dubai government representative, said: "Our relationship with the DPC-DUMA consortium was established in 1961. This relationship has served Dubai well over the years.

"Forty years later, it is clear that production will far outlast the period of the concession agreement and all parties agree that it is appropriate to initiate a transition of operatorship to the government at this time."

DPC president Bill Arnold said the company "will do its part to successfully facilitate the handover of the operations to the government."

Dubai oil will continue to be freely traded on the international oil market under contracts established by the government and DPE.