Dh1.51b for Adnoc oil probe

Abu Dhabi National Oil Company (Adnoc) has awarded exploration concession rights for Abu Dhabi’s Offshore Block 3 to an Italian-Thai consortium that will invest up to Dh1.51 billion during the exploration phase.

The consortium is led by Eni Abu Dhabi, a wholly-owned subsidiary of Italy’s multinational energy company, Eni, and PTTEP Mena, a wholly-owned subsidiary of Thailand’s PTT Exploration and Production Public Company Limited.

The latest award follows Adnoc’s granting of concession rights of an onshore block to Occidental earlier this month as the oil giant continues to leverage strategic partnerships to accelerate the exploration and development of Abu Dhabi’s hydrocarbon resources, an Adnoc statement said.

Offshore Block 3 covers an offshore area of 11,660 sqkm northwest of Abu Dhabi city. The concession agreement was signed by Dr Sultan bin Ahmad Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc Group CEO; Claudio Descalzi, CEO of Eni; and Phongsthorn Thavisin, CEO of PTTEP.

This award comes about a month after Abu Dhabi announced the discovery of recoverable unconventional oil resources estimated at 22 billion stock tank barrels (STB) and an increase in conventional oil reserves of two billion STB which boosted the UAE’s conventional reserves to 107 billion STB.

Al Jaber said the latest award validates the oil company’s “targeted approach to value-add partnerships that contribute the right combination of capital, technology, capabilities and market access to accelerate the development of Abu Dhabi’s hydrocarbon resources.”

“Despite volatile market conditions, we are making very good progress in delivering Abu Dhabi’s second competitive block bid round, underscoring our world-class resource potential and the UAE’s stable and reliable investment environment. We continue to welcome partners that share our vision to sustainably unlock value from our hydrocarbon resources for our mutual benefit, as we deliver on our 2030 strategy and enable long-term returns to the UAE,” Al Jaber said. As per the deal, Eni will operate the exploration phase of the concession, and PTTEP and Eni will collectively hold a 100 per cent stake in the exploration phase, investing up to Dh1.51 billion towards exploration and appraisal drilling. In addition to drilling exploration and appraisal wells, the exploration phase will see Eni and PTTEP leverage and contribute financially and technically to Adnoc’s mega seismic survey, said the statement. Descalzi said offshore Block 3 represents a challenging opportunity that can unlock significant value thanks to exploration and appraisal of shallow and deep reservoirs.

Following commercial discovery during the exploration phase, Eni and PTTEP will, together, have the right to a production concession to develop and produce such commercial discoveries.

Adnoc has the option to hold a 60 per cent stake in the production phase of the concession. The term of the production phase is 35 years from the commencement of the exploration phase.

Thavisin said the concession award offers another great opportunity for PTTEP to strengthen collaboration with world-class strategic partners Eni and Adnoc. “The consortium will bring capabilities, experiences and technology to accelerate the development of Offshore Block 3, as well as Offshore Blocks 1 and 2, and lead to a successful discovery.”

In January 2019, a consortium led by Eni and PTTEP was awarded two offshore blocks in Abu Dhabi’s first competitive bid round. The consortium continues to explore for oil and gas in the blocks known as Offshore 1 and Offshore 2, located northwest of Abu Dhabi city. — issacjohn@khaleejtimes.com