French oil company signs agreement to take a 10% stake in a new 40-year onshore concession
State-run Abu Dhabi National Oil Company (ADNOC) signed an agreement on Thursday with Total giving the French oil major a 10 percent stake in a new 40-year onshore concession to help operate the United Arab Emirates' biggest oilfields.
Nine Asian and Western firms bid for stakes in the Abu Dhabi Company for Onshore Oil Operations (ADCO) concession after a deal with Western oil majors dating back to the 1970s expired in January 2014.
Four oil majors - ExxonMobil, Royal Dutch Shell , Total and BP - had each held 9.5 percent equity stakes in the ADCO concession since the 1970s.
After the 40-year deal expired last year, ADNOC took 100 percent of the concession, as political leaders in Abu Dhabi weighed up whether to bring in Asian firms or stick with old partners, industry and diplomatic sources said.
Shell, Total and BP have made new bids, which were evaluated by Abu Dhabi, the capital of the UAE, while Exxon has decided against bidding, sources have told Reuters.
The new concession signed with Total was effective from Jan. 1, 2015, and covers Abu Dhabi's 15 principal onshore oilfields that represent more than half of the emirate's production, the company said.
"Total is honoured to be the first international oil company to be chosen ... and to be entrusted with the mission of technical leader on two major groups of fields," Chief Executive Officer Patrick Pouyanne said in a statement.
ADNOC said in a statement Total "presented the best technical and commercial offers." More companies will be added to the concession soon, ADNOC said.
Financial details were not disclosed.
A Shell spokesman told Reuters the company has received a proposal from ADNOC regarding the company's bid for the onshore concession, but declined to give further details. BP declined immediate comment.
US firm Occidental Petroleum Corp, Italy's ENI , China National Petroleum Corp (CNPC), Norway's Statoil, Japan's Inpex and Korea National Oil Corp have also bid for the new deal.
An Inpex spokesman had no comment on Thursday's announcement.
Each company submitted two proposals last year -- one for a 5 percent stake and another for 10 percent, with a one year validity, but bids were later extended.
The fields, which produce 1.6 million barrels per day (bpd), are expected to reach 1.8 million bpd from 2017, Total and ADNOC said.
Total has stakes in several other concessions and companies in Abu Dhabi, including a 75 percent stake in the Abu Al Bu Khoosh field and 13.3 percent in Abu Dhabi Marine (ADMA).For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.