Dubai: The Abu Dhabi National Oil Company (Adnoc) awarded a 20 per cent stake in an off-shore concession to Cepsa, an oil and gas company based in Madrid. The agreement is for 40 years and effective from March 9, 2018.
In a statement on Sunday, Adnoc did not disclose the value of the stake, but said that Cepsa contributed a participation fee of Dh5.5 billion to enter the concession. Adnoc still retains a majority stake of 60 per cent in the SARB and Umm Lulu concession.
Adnoc said the choice of Cepsa, which is wholly-owned by Abu Dhabi’s Mubadala Investment Company, underpins the company’s strategy to maximise returns from its resources and expand its downstream business.
The concession area is made up of two main fields under development; Umm Lulu, which is part of the former ADMA concession, and SARB, as well as two smaller fields, Bin Nasher and Al Bateel.
The ADMA concession has been split into three new concessions, Adnoc said, to maximise commercial value.
Dr Sultan Al Jaber, group chief executive officer of Adnoc, said the agreement will ensure Adnoc continues to maximise value from its hydrocarbon resources.
“The agreement also reflects Adnoc’s new partnership approach, as we expand and diversify our partner base across Adnoc’s integrated value chain,” he said.
“[W]e are also working with Cepsa to explore expansion opportunities in our downstream business in the UAE and overseas that will deliver competitive returns and long-term growth opportunities for both parties and for the UAE.”
Adnoc and Cepsa had earlier worked together, with the two having signed an agreement in November 2017 to evaluate a new Linear Alkyl Benzene complex in Abu Dhabi. The companies plan to progress the basic engineering of the proposed complex in 2018.
The concession award is the first to be announced for the second of three new offshore concession areas, Adnoc said.
Pedro Miro, vice-chairman and chief executive officer of Cepsa, said the Adnoc concession, which has relatively low production cost, will add substantial reserves to the company’s portfolio and will enable it to “make considerable strides” to achieving its objectives.
The company is finalising concession agreements with other potential partners for the remaining stakes in the SARB and Umm Lulu, the Lower Zakum, and the Umm Shaif and Nasr concessions.
