Combined area of the two offshore blocks is approximately 8,000 square kilometers
ADNOC has option to hold 60 percent stake in production phase, following commercial discovery
First blocks to be awarded as part of Abu Dhabi’s competitive open block licensing strategy to accelerate exploration and unlock value from its substantial hydrocarbon resources
Abu Dhabi, UAE – The Abu Dhabi National Oil Company (ADNOC) announced, today, the signing of two historic agreements, awarding two offshore blocks to a consortium led by Italy’s multinational energy company, Eni, and Thailand’s PTT Exploration and Production Public Company Limited (PTTEP), following a competitive bid round.
The two blocks in the northwest of Abu Dhabi – Offshore 1 and Offshore 2 – are the first blocks to be awarded among the geographical areas that were offered for commercial bidding by ADNOC, in April 2018, as part of Abu Dhabi’s first competitive open block licensing strategy. The award of the two blocks was endorsed by Abu Dhabi’s Supreme Petroleum Council (SPC).
Under the terms of the agreements, Eni will operate the concessions and PTTEP and Eni will both hold a 100 percent stake in the exploration phase, investing at least AED 844 million (US $230 million) to explore for oil and gas, and appraise the existing discoveries in Offshore Block 2. At the same time, the exploration and appraisal plans for the Offshore Block 1 will be finalized. The two blocks cover a combined area of approximately 8,000 square kilometers.
Upon successful exploration – and having established the commerciality of the discovered resources – Eni and PTTEP will, together, be granted the opportunity to develop and produce any discoveries, with ADNOC retaining the option to hold a 60 percent stake in the production phase.
The concession agreements were signed by His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO; Claudio Descalzi, CEO of Eni; and Phongsthorn Thavisin, President and Chief Executive Officer of PTTEP.
H.E. Dr. Al Jaber said: “These historic agreements on the first blocks to be awarded, following a competitive bidding process, represent a major advancement in how Abu Dhabi and ADNOC unlocks and maximizes value from its substantial hydrocarbon resources, in line with the leadership’s directives.
“The awards underline ADNOC’s 2030 smart growth strategy and our targeted approach to engage with value-add partners who can contribute the right combination of capital, technology and capabilities to accelerate the development of Abu Dhabi’s hydrocarbon resources as the company strives to deliver long-term and sustainable returns to the UAE and continues to reliably respond to the world’s growing needs for energy.
“These awards build on ADNOC’s and Eni’s growing partnerships on various fronts, broaden and reinforce ADNOC’s strategic partnership base as we add, for the first time, Thailand’s PTTEP, and reinforces the confidence the international community places on the UAE’s stable and secure and investment environment.”
The awards follow the SPC’s approval of ADNOC’s new integrated gas strategy and the company’s plans to increase its oil production capacity to 5 million barrels per day (mmbpd) by 2030. The strategy is designed to unlock and maximize value from Abu Dhabi’s substantial oil and gas reserves and enable the UAE to achieve gas self-sufficiency and potentially transition to a net gas exporter.
Descalzi said: “This award represents a new important step towards Eni’s expansion in one of the world’s leading regions for the oil and gas industry, not only by participating in producing fields, but also by exploring new blocks. In particular, Block 1 and 2 are extremely important, thanks to the virtuous synergies they will have with Ghasha concession projects. This further reinforces the partnership between Eni and ADNOC, and Eni will make available its exploration expertise and leading-edge technology to untap additional resources in the offshore of Abu Dhabi.”
Thavisin said: “We are excited and enthusiastic to establish our first-ever presence in the UAE by investing in Offshore 1 and Offshore 2 blocks. This achievement opens windows of opportunity for us to collaborate with world-class oil and gas companies – ADNOC and Eni – and to invest in one of the world’s prolific areas of oil and gas resources. We believe the consortium will bring capabilities, experience and technology to develop these exploration blocks and that the partnership will create long-term value for all involved parties.”
The exploration phase will also see Eni and PTTEP leverage – and contribute financially and technically to – ADNOC’s mega seismic survey that is deploying industry-leading technologies to capture high-resolution three-dimensional (3D) images of complex subsurface structures, up to 25,000 feet, which will be used to identify potential hydrocarbon reservoirs. In July 2018, ADNOC awarded AED 5.88 billion (US $1.6 billion) contracts to carry out the world’s largest continuous 3D onshore and offshore seismic survey, covering an area up to 53,000 square kilometers, including the area containing the two offshore blocks awarded to Eni and PTTEP. In addition, the award of a share of the two offshore blocks to Eni provides the Italian company with an opportunity to leverage potential synergies with the neighboring Ghasha Concession in which Eni was awarded a 25 percent share in November 2018.
Earlier in 2018, ADNOC also awarded Eni a 10 percent stake in the Umm Shaif and Nasr Offshore concession and a 5 percent stake in the Lower Zakum concession. These awards marked the first time an Italian energy company was granted concession rights in Abu Dhabi’s oil and gas sector.
The remaining geographical areas within Abu Dhabi’s first competitive block bid round, which are all onshore, will be awarded at a later date.
The UAE is the world’s seventh-largest oil producer, with about 96 percent of its reserves within the emirate of Abu Dhabi. Located in one of the world’s largest hydrocarbon super-basins, there remains undiscovered and undeveloped potential in the numerous stacked reservoirs. Based on existing data from detailed petroleum system studies, seismic surveys, log files and core samples from hundreds of appraisal wells, estimates suggest these new blocks hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas. Some of the blocks already have discoveries, and within the combined area there are 310 targeted reservoirs from 110 prospects and leads. In addition to the country’s conventional oil and gas accumulations, some of the offered blocks also contain significant unconventional resource potential.
-Ends-
About ADNOC
ADNOC is one of the world’s leading diversified energy and petrochemicals groups with a daily output of about 3 million barrels of oil and 10.5 billion cubic feet of natural gas. With 14 specialist subsidiary and joint venture companies, ADNOC is a primary catalyst for the UAE’s growth and diversification. To find out more visit www.adnoc.ae.
Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
