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Wed 16 Oct 2019 09:01 AM

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Russia's Lukoil awarded 5% stake in Abu Dhabi gas concession

The concession marks the first time that a Russian firm joins an Adnoc concession

Russia's Lukoil awarded 5% stake in Abu Dhabi gas concession
Abu Dhabi National Oil Company CEO Sultan Ahmed Al Jaber, Russian Direct Investment Fund CEO Kirill Dmitriev and Lukoil President Vagit Alekperov (L-R) sign the Ghasha concession agreement following Emirati-Russian talks at the Qasr Al Watan presidential palace.

Abu Dhabi’s government and the Abu Dhabi National Oil Company (Adnoc) have awarded a 5 percent stake in the Ghasha ultra-sour gas concession to a subsidiary of Russia’s Lukoil, the company announced on Tuesday.

In a statement, Adnoc said that it had also signed a framework agreement with Lukoil and the management company of the Russian Direct Investment Fund (RDIF) to explore potential future cooperation in the Ghasha concession.

The concession marks the first time that a Russian firm joins an Adnoc concession. Under the terms of the agreement, Lukoil will invest an initial sum of $190 million as a signing fee for the concession, while Adnoc maintains a majority stake. Ghasha’s other concession holders include Italy’s Eni, Germany’s Wintershall Dea and Austria’s OMV.

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“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,” said UAE Minister of State and Adnoc Group CEO Sultan Ahmed Al Jaber.

“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.”

The Ghasha mega-project is ultimately expected to produce more than 1.5 billion standard cubic feet per day of natural gas by around 2025 – enough to power over 2 million homes.

Additionally, over 120,000 barrels per day of oil and high-value condensates are expected to be produced.

“The large-scale project to develop the Ghasha concession opens up great investment opportunities for RDIF and Lukoil,” said RDIF CEO Kirill Dmitriev. “The agreement with Adnoc reflects a high-level of energy cooperation with the UAE and confidence in the expertise of partners from the Russian Federation to help develop one of the major natural resources projects in the Middle East.”

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