Abu Dhabi: The Abu Dhabi Government and the Abu Dhabi National Oil Company (Adnoc) have awarded Russian-listed concern PJSC Lukoil Oil Company (Lukoil) a 5-per cent stake in the Ghasha ultra-sour gas concession.
The concession comprises the Hail, Ghasha, Dalma and other offshore sour gas fields in Abu Dhabi.
The award to Lukoil marks the first time that a Russian company has joined an Adnoc concession, with the signing taking place in the presence of His Highness Sheikh Mohamed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Vladimir Putin, President of the Russian Federation.
Lukoil is one of the largest publicly-traded, vertically-integrated oil and gas companies in the world, accounting for more than two per cent of the world’s oil production, and around one per cent of the world’s proven hydrocarbon reserves.
Under the terms of the concession award, Lukoil will invest an initial sum of Dh697.3 million ($190 million) as a signing fee for the concession.
Adnoc maintains a majority stake in the concession, which has as further concession holders Italy’s Eni, Germany’s Wintershall Dea, and Austria’s OMV.
“We are very pleased to partner with Lukoil on this crucial project, which also marks the first time that we partner with a Russian energy company across our full value chain. We are also pleased to have agreed a strategic framework agreement with Lukoil and RDIF that builds on the award and offers potential for collaboration in relation to the Ghasha concession,” said Dr Sultan Ahmed Al Jaber, Minister of State and Adnoc Group chief executive officer.
“The concession award, as well as the framework agreement, reflect the strong and strategic bilateral ties between the UAE and Russia and highlight the important role of energy cooperation in strengthening the relations between our two countries,” he added.
“Lukoil joins our other value-add partners on the Ghasha concession, which is integral to our objective of enabling gas self-sufficiency for the UAE. The transaction is consistent with Adnoc’s targeted approach to engage with strategic partners that contribute the right combination of best-in-class expertise and advanced technology,” Al Jaber said.
The Ghasha mega-project is expected to produce over 1.5 billion standard cubic feet per day (bscfd) of natural gas by around 2025. The natural gas will be enough to provide electricity to more than two million homes. Also, more than 120,000 barrels per day of oil and high-value condensates are expected to be produced.
Adnoc’s integrated gas strategy will see the development, in phases, of Abu Dhabi’s substantial gas reserves, as the UAE moves towards gas self-sufficiency and aims to transition from a net importer of gas to a potential net exporter of gas.