The Abu Dhabi National Oil Company (ADNOC) has awarded the exploration rights for Abu Dhabi’s Offshore Block 4 to Cosmo E&P Albahriya Limited, a wholly-owned subsidiary of Japan’s Cosmo Energy Holdings Co (Cosmo).
Under the terms of the agreement, Cosmo will hold a 100 percent stake in the exploration phase, investing up to $145 million (AED532 million) towards exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities in the block, a statement from ADNOC said.
Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said: “This concession award builds on our long-standing relationship with Cosmo and reinforces the deep-rooted and successful strategic relationship between the UAE and Japan, ADNOC’s largest importer of oil and gas products."
Offshore Block 4 covers an area of 4,865 square kilometers northwest of Abu Dhabi city. The award of Offshore Block 4 follows the recent exploration block awards to Occidental as well as a consortium led by Italy’s Eni and Thailand’s PTTEP.
The award has been approved by Abu Dhabi’s newly formed Supreme Council for Financial and Economic Affairs (SCFEA) and marks the first of such awards endorsed by the SCFEA.
Following a successful commercial discovery during the exploration phase, Cosmo will have the right to a production concession to develop and produce such commercial discoveries. ADNOC has the option to hold a 60 percent stake in the production phase of the concession, the statement said.
The term of the production phase is 35 years from the commencement of the exploration phase and the block offers the potential to create significant in-country value for the UAE over the lifetime of the concession.
The exploration phase will also see Cosmo leverage and contribute financially and technically to ADNOC’s mega seismic survey, which is acquiring 3D seismic data within the block area, the statement said, adding, the data already acquired over a large part of the block combined with its proximity to existing oil and gas fields, suggests the concession area has promising potential.
(Writing by Seban Scaria; editing by Daniel Luiz)
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