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Thu 13 Dec 2012 11:17 AM

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BP back in running for UAE oil concession - report

Oil giant had originally been excluded from bidding as part of diplomatic tit-for-tat

BP back in running for UAE oil concession - report

BP, the British oil major omitted from a pre-qualification process to develop Abu Dhabi’s largest onshore oil fields, will be allowed to bid for the 1.4m barrel a day concession, The Financial Times reported.

The oil giant, which holds a 9.5 percent stake in the Abu Dhabi National Oil Company (ADCO) concession coming up for renewal in 2014, was unexpectedly excluded from bidding after it failed to receive a pre-qualifying letter. The director general of ADCO on Thursday said the letter had simply been “just soliciting interest” from parties.

“If there was anything there, it’s gone,” Abdulla Nasser Al Suwaidi told the newspaper. “They didn’t miss anything,” he said, adding that the pre-qualifying letter was “not necessary” for a company of BP's stature.

UAE officials in July confirmed that BP – one of four western multinationals operating the 75-year concession – did not receive a letter inviting them to bid. Losing the bid would cost BP around 3.5 percent of its global production, said the FT.

The move was widely seen as a snub, reflecting the Gulf state's rulers' annoyance with the UK’s support of reforms in the Arab world and Abu Dhabi’s desire to award more lucrative deals to Asian partners.

British Prime Minister David Cameron’s visit to the UAE last month was part of a diplomacy tour designed to strengthen the country's defence and commercial ties in the Gulf.

The trip came amid strained relations between the UK and the Gulf following Britain’s support for revolutions that toppled Arab leaders and concern in the Gulf that it is too welcoming of the Islamists that replaced them.

In October, Saudi officials told the BBC that they were "insulted" by a UK government report recommending that Britain review its diplomatic relations with the world's second largest oil producer following its crackdown on internal unrest. In the same month, the UAE's ambassador to the UK publicly lambasted an opinion piece in the Guardian newspaper that criticised ties between the two countries amid a spate of arrests of Islamist dissidents in the country.

BP's CEO last month said he was hopeful the firm would be included in the process. “I’m positive about it ... I’m optimistic that cooperation will go on for a long time,” said Bob Dudley.

“We never knew we were excluded and I think the spirit and the feeling of the communications that we have is positive and we have been talking at multiple levels on this,” he added.

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