Dr. Sultan Ahmad 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 sign the agreement in Abu Dhabi. Image Credit: WAM

Abu Dhabi: Abu Dhabi National Oil Company (Adnoc) on Saturday awarded exploration of two offshore blocks to Italy’s Eni and Thailand’s PTTEP, following Abu Dhabi’s first competitive block licensing 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.

Under the terms of the agreements, Eni will operate the concessions and PTT Exploration and Production Public Company Limited (PTTEP) and Eni will both hold a 100 percent stake in the exploration phase, investing at least Dh844 million ($230 million) to explore for oil and gas, and appraise the existing discoveries in Offshore Block 2.

The two blocks cover a combined area of approximately 8,000 square kilometers, Adnoc said in a statement on Saturday.

Historic agreements

“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,” said Dr Sultan Ahmad Al Jaber, minister of state and CEO of Adnoc.

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 awards follow the SPC’s (Supreme Petroleum Council) 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.