ADNOC Signs Exploration Deal with Eni and PTTEP
The Abu Dhabi National Oil Company (ADNOC) revealed on the 21st December that it has signed an exploration concession agreement with a consortium led by Eni Abu Dhabi BV, a wholly-owned subsidiary Eni, and PTTEP MENA Ltd, a wholly-owned subsidiary of PTT Exploration and Production Public Company Limited.
The deal, which has been approved by Abu Dhabi’s Supreme Petroleum Council (SPC), awards the exploration rights for Abu Dhabi’s Offshore Block 3 to the consortium.
Under the terms of the agreement, Eni will operate the exploration phase of the concession. PTTEP and Eni will collectively hold a 100 percent stake in the exploration phase, investing up to US$412 million (AED1.51 billion) towards exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities in the block.
In the event of a successful commercial discovery during the exploration phase, Eni and PTTEP will have the right to a production concession to develop and produce such commercial discoveries. ADNOC has the option to hold a 60 percent stake in the production phase of the concession and the term of the production phase is 35 years from the commencement of the exploration phase.
“This concession award reinforces ADNOC and Eni’s growing partnership across our value chain and deepens our relationship with Thailand’s PTTEP, one of the key markets for our crude oil and products,” Ahmed Al Jaber, the UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said in a company statement.
“This again validates our targeted approach to value-add partnerships that contribute the right combination of capital, technology, capabilities and market access to accelerate the development of Abu Dhabi’s hydrocarbon resources,” he added.
Eni CEO Claudio Descalzi said, “this award follows the one achieved by the same consortium in 2019 for offshore exploration Blocks 1 and 2 and represents a further important step towards the realisation of Eni’s strategy to become a leading actor in the development and production in Abu Dhabi, a leading region for the oil and gas industry, while contributing through its expertise in exploration to add further resources and exploit all potential synergies with the surrounding fields”.
“It also further strengthens our relationship with our valuable partner PPTEP. Offshore Block 3 represents a challenging opportunity that can unlock significant value thanks to exploration and appraisal of shallow and deep reservoirs,” he added.
Phongsthorn Thavisin, the CEO of PTTEP, said, “this concession award offers another great opportunity for PTTEP to strengthen collaboration with world-class strategic partners Eni and ADNOC”.
“The strategic partnership has been established to jointly contribute to the petroleum development in UAE and be part of the growing industry. Meanwhile, this business progress has also reinforced our presence in the Middle East following the company’s Execute and Expand strategy. Such approach aims to sustainably increase both petroleum reserves and production in the future,” he added.
Offshore Block 3 covers an offshore area of 4,501 square miles northwest of Abu Dhabi city. ADNOC notes that new 3D seismic data has been acquired for a part of the block, and says this, combined with its proximity to the existing onshore oil and gas fields, suggests the concession area has promising potential. ADNOC’s latest award follows an award earlier this month of an onshore block to Occidental.
In January 2019, a consortium led by Eni and PTTEP was awarded two offshore blocks in Abu Dhabi’s first competitive bid round. The consortium continues to explore the blocks, known as Offshore 1 and Offshore 2, which are located northwest of Abu Dhabi city. ADNOC launched Abu Dhabi’s second competitive block bid round in 2019, offering a set of onshore and offshore blocks, on behalf of the SPC.
Source: Rigzone