Abu Dhabi: Abu Dhabi National Oil Company (Adnoc) on Saturday said it had 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 kilometres, Adnoc said in a statement on Saturday.
“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.
“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.”
The remaining geographical areas within Abu Dhabi’s first competitive block bid round, which are all onshore, will be awarded at a later date.
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.