The concession, which has a term of 40 years, was signed by Dr. Sultan Al Jaber, UAE Minister of State and Adnoc Group CEO and Claudio Descalzi, CEO of ENI. Image Credit: WAM

Abu Dhabi: The Abu Dhabi government and the Abu Dhabi National Oil Company (Adnoc) on Monday announced that they have signed the first of a series of concession agreements with Italy’s multinational oil and gas company, ENI, awarding it a 25 per cent stake in its offshore ultra-sour gas mega project.

The Ghasha Concession consists of the Hail, Ghasha, Dalma and other offshore fields. ENI will contribute 25 per cent of the development cost of the multi-billion US dollar project.

The announcement follows the Supreme Petroleum Council’s approval of Adnoc’s new gas strategy, which involves a Dh486 billion capital investment expenditure.

The concession, which has a term of 40 years, was signed by Dr. Sultan Al Jaber, UAE Minister of State and Adnoc Group CEO, and Claudio Descalzi, CEO of ENI.

“Development of our Hail, Ghasha and Dalma ultra-sour gas offshore resources, at commercial rates, will make a significant contribution towards ... bringing forward the day when the UAE will not only be self-sufficient in gas but also transitions to net exporter of gas,” Al Jaber said.

Adnoc is in discussion with further potential partners, for the remaining 15 per cent of the available 40 per cent stake in Ghasha concession, earmarked for foreign oil and gas companies.

The Hail, Ghasha and Dalma ultra-sour gas project will tap into the Arab basin, which is estimated to hold trillions of standard cubic feet of recoverable gas. The project is expected to produce more than 1.5 billion cubic feet of gas per day when it comes on stream around the middle of the next decade. The Ghasha Concession is expected to produce enough gas to provide electricity to more than two million homes. Once complete, the project will also produce over 120,000 barrels of oil and high value condensate per day.

In addition to developing the Ghasha Concession area, Adnoc also plans to increase production from its Shah field to 1.5 billion cubic feet per day and move forward to develop the sour gasfields at Bab and Bu Hasa. Adnoc will also unlock other sources of gas, which include Abu Dhabi’s gas caps and unconventional gas reserves, as well as new natural gas accumulations which will continue to be appraised and developed as the company pursues its exploration activities.

In developing the Hail, Ghasha and Dalma Arab reservoirs, Adnoc will capitalise on its world-leading expertise and successes in ultra-sour gas development, gained from the development of the Shah Arab reservoir, creating an ultra-sour gas hub for the region.

In March, ENI was awarded a 10 per cent interest in Adnoc’s Umm Shaif and Nasr concession and a five per cent interest in the Lower Zakum concession. The awards marked the first time an Italian energy company had been given concession rights in Abu Dhabi’s oil and gas sector.