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Sat 2 Feb 2019 11:35 AM

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ADNOC, US firm sign $244m Abu Dhabi oil exploration deal

Occidental Petroleum ink agreement for Onshore Block 3 which covers an area of 5,782 sq km located in the Al Dhafra region

ADNOC, US firm sign $244m Abu Dhabi oil exploration deal
The concession agreement, which has a term of 35 years, was signed by Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Vicki Hollub, president and CEO of Occidental.

Abu Dhabi National Oil Company (ADNOC) announced on Saturday, the signing of an agreement to award an onshore block – known as Onshore Block 3 – to US-based oil and gas exploration and production company Occidental Petroleum.

The award has been endorsed by Abu Dhabi’s Supreme Petroleum Council (SPC).

Onshore Block 3 covers an area of 5,782 sq km located in the Al Dhafra region. Existing 3D seismic data already covers a large part of the block which, combined with its proximity to the Shah, Asab, Haliba and Sahl fields, suggests the concession area has very promising potential, a statement said.

Following the recent award of Abu Dhabi’s two offshore blocks, Onshore Block 3 is the first onshore block to be awarded among the geographical areas that were offered for commercial bidding by ADNOC last April.

Abu Dhabi’s new block licensing strategy aims to accelerate the exploration and development of untapped resources to replenish its rich reserves base and drives new commercial opportunities.

Under the terms of the agreement, Occidental will hold a 100 percent stake in the exploration phase, investing AED893 million ($244 million), including a participation fee, to explore for oil and gas in Onshore Block 3.

Upon successful exploration, Occidental will be granted the opportunity to develop and produce any discoveries. ADNOC has the option to hold a 60 percent stake in the production phase of the concession.

The concession agreement, which has a term of 35 years, was signed by Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Vicki Hollub, president and CEO of Occidental.

Al Jaber said: “This concession award demonstrates how ADNOC is accelerating the exploration and development of Abu Dhabi’s vast untapped hydrocarbon resources. It will help ADNOC to unlock value and stay ahead of the long-term increase in demand for energy and oil and gas products, while further strengthening Abu Dhabi’s position as an essential energy provider to the world. The award also signals our continued and increasing collaboration with US companies.”

Hollub added: “We are honoured to partner with ADNOC to unlock Abu Dhabi’s vast untapped resources as part of its smart growth strategy. We have had a successful partnership with ADNOC developing the Shah Gas Field and look forward to continuing to work together on projects of strategic importance.”

The UAE is the world’s seventh-largest oil producer, with about 96 percent of its reserves within the emirate of Abu Dhabi.

Located in one of the world’s largest hydrocarbon super-basins, there remains undiscovered and undeveloped potential in the numerous stacked reservoirs.

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