Adnoc awards exploration concession to Occidental

Abu Dhabi - US firm selected after very competitive bid round that builds on success of UAE energy giant's debut bid round completed last year

Abu Dhabi National Oil Company (Adnoc) has awarded the exploration rights for Abu Dhabi Onshore Block 5 to Occidental, a US-based international oil and gas exploration and production company.

The energy leader said the award to Occidental represents a further deepening of UAE-US bilateral relationships, as well as the continued expansion of Adnoc’s strategic partnerships.

As per the deal, Occidental will hold a 100 per cent stake in the exploration phase, investing up to Dh514 million, including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an onshore area of 4,212 sqkm southeast of Abu Dhabi city, according to an Adnoc statement.

The latest award comes a few weeks after Abu Dhabi’s Supreme Petroleum Council (SPC) 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.

The agreement was signed by Dr Sultan bin Ahmad Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc Group CEO, and Vicki Hollub, president and CEO of Occidental.

The award follows the SPC’s endorsement last month for Adnoc to begin awarding exploration blocks in Abu Dhabi’s second competitive block bid round. Dr Al Jaber said the concession award highlights the important role of energy cooperation in deepening the strong and deep-rooted strategic relationship between the UAE and the US. “Crucially, the award underscores the attractiveness of Abu Dhabi’s huge untapped resource potential and Adnoc’s ability to continue to secure foreign direct investment to the UAE’s stable and trusted business environment, despite tough market conditions.”

He said Occidental was selected after a very competitive bid round that builds on the success of Adnoc’s debut bid round completed last year as part of Abu Dhabi’s block licensing strategy, aimed at accelerating the exploration and development of substantial hydrocarbon resources.

Hollub said Occidental is partnering with Adnoc on a second exploration concession contiguous to Onshore Block 3, where the US firm completed two exploration wells with extremely promising results.

“We see significant potential in Onshore Block 5 and, in partnership with Adnoc, will continue to work to help unlock the vast untapped resources in Abu Dhabi.”

Adnoc launched Abu Dhabi’s second competitive block bid round in 2019, offering a set of major onshore and offshore blocks, on behalf of SPC.

R&D deal with Exxon

Meanwhile, Adnoc has signed a strategic framework agreement with Exxon Al Khalij, focused on exploring joint technology research and development, partnership opportunities across the oil and gas upstream value chain.

Under the terms of the agreement, Adnoc and ExxonMobil will identify areas of mutual interest for conducting R&D and co-developing technology solutions that will help increase upstream operational efficiencies, strengthen health, safety and environment, HSE, management, and unlock business value.

— issacjohn@khaleejtimes.com