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Adnoc makes first major global gas deal with Azeri acquisition

Abu Dhabi-based company would acquire a 30% equity stake in Absheron gas and condensate field in the Caspian Sea off the coast of Baku

Abu Dhabi National Oil Company (Adnoc) has said it would acquire a 30 per cent equity stake in the Absheron gas and condensate field in the Caspian Sea off the coast of Baku, Azerbaijan, marking the company’s first major international purchase of upstream hydrocarbon assets.

Adnoc has entered into an agreement with TotalEnergies and Azerbaijan's state-owned Socar to acquire the stake. The transaction will see TotalEnergies and Socar each sell a 15 per cent stake in the project, leaving both with a 35 per cent share.

The agreement comes less than a month after TotalEnergies announced the start of production from the first phase of the project. The first phase has a production capacity of 35,000 b/d of oil equivalent (boe/d), comprising around 22,000 boe/d (4.0 million cubic meters per day) of natural gas and 12,000 b/d of condensate. The gas is being sold in the domestic market in Azerbaijan, while the condensate is being exported through the 1mn b/d Baku-Tbilisi-Ceyhan pipeline.

Adnoc’s investment in the Caspian region is part of the strategy of the UAE’s state oil and gas giant to expand on international gas markets .The deal marks Adnoc's "first investment in an upstream asset outside of the UAE.

“We believe this strategic partnership with SOCAR and TotalEnergies, unlocks the potential of the Caspian region for decades to come and complements a broader energy collaboration between the UAE and Azerbaijan that will accelerate the growth of the global renewable energy sector as both countries take bold steps to transition towards a lower-carbon future,” Musabbeh Al Kaabi, executive director of Low Carbon Solutions and International Growth at Adnoc, said in a statement.

“TotalEnergies is pleased to welcome Adnoc, one of its strategic partners, into the Absheron gas field, where production of the first phase started in early July, and which offers a significant further development potential to meet the growing gas demand,” Nicolas Terraz, president, Exploration & Production at TotalEnergies, said.

A planned second phase at Absheron could raise gas production to 5.0 billion cubic metre per year. But as of last month the project partners had yet to agree on a development scheme, and whether further gas output could be exported along Azerbaijan's southern corridor route to Europe across Georgia and Turkey.

Socar said the deal should "further strengthen the strategic relationship between the UAE and Azerbaijan, and contribute to the latter's position as a reliable gas supplier Socar said it has signed a separate preliminary agreement with Adnoc that envisages its participation in upstream projects in Abu Dhabi, the exploration of "potential areas of collaboration with respect to oil and gas investment opportunities in third countries" and co-operation in renewable and lower-carbon energies. issacjohn@khaleejtimes.com