Adnoc signs concession agreements with Total

Total is Adnoc's largest and one of its longest international partners.

The Abu Dhabi National Oil Company (Adnoc) signed two major offshore concession agreements valued at Dh5.3 billion with Total of France, the world's fourth largest global oil and gas company, on Sunday. The deals are the latest in a series of concession agreements the Abu Dhabi oil giant had signed this year with leading global oil majors.
Under the terms of the new agreements, Total has been awarded a 20 per cent interest in the Umm Shaif and Nasr concession and a 5 per cent interest in the Lower Zakum concession.
The signing took place at the Abu Dhabi Louvre, a cultural landmark and powerful symbol of the bilateral relationship between the UAE and France.
Last Sunday, Adnoc awarded two concessions to Italy's multinational oil and gas company Eni in the same offshore concession areas.
Total is one of its longest international partners of Adnoc active in Abu Dhabi's oil and gas sector since 1939.
In a statement, Adnoc said the French oil giant contributed a participation fee of Dh4.2 billion to enter the Umm Shaif and Nasr concession and a fee of Dh1.1 billion to enter the Lower Zakum concession. Both concessions are being operated by Adnoc Offshore on behalf of all concession partners.
Dr Sultan Ahmed Al Jaber, Adnoc Group Chief Executive Officer, and Patrick Pouyanné, Chairman and CEO of Total, signed the agreements, which have a term of 40 years and an effective date of March 9, 2018.
Al Jaber said the latest agreements with Total marked an important step to further strengthen value-adding partnership with one of the world's largest integrated upstream and downstream companies.
"Total brings deep knowledge and understanding of Abu Dhabi's offshore oil and gas fields, as well as specialist expertise and technology that will help accelerate the development of the giant Umm Shaif gas cap," said Al Jaber.
"Adnoc has recently seen encouraging results from the first gas cap production pilot well at Umm Shaif, which will play an important role in delivering our 2030 smart growth strategy and a sustainable and economic gas supply. At the same time, we both see tremendous opportunities, through this partnership, to create greater value and generate higher returns across our joint activities," said Al Jaber.
Pouyanné said the new deals marked a new chapter in Total's long and successful partnership with Adnoc.
"These agreements ensure Total secures long-term access to significant and competitive hydrocarbon resources that we already know very well. We are committed to working alongside Adnoc and the other concession partners, utilising our experience gained from the former Adma offshore concession, to fully realise the potential of both of these new concession areas."
Total joins Italy's Eni as well as an Indian consortium, led by ONGC Videsh, and Japan's Inpex as stakeholders in the Lower Zakum concession.
In the Umm Shaif and Nasr concession, Total joins Italy's Eni, which was recently awarded a 10 per cent stake. The Umm Shaif field's Arab reservoir is characterised by a huge gas cap - one of the largest in the region - with reserves rich in condensates.
Adnoc plans to process 500 million standard cubic feet of gas per day from Umm Shaif's gas cap to help meet Abu Dhabi's growing domestic demand for energy and reduce reliance on imported gas. The condensates, from the gas cap, will be refined to extract higher value products that can be used in a variety of petrochemical applications.
Adnoc said it is finalising opportunities, with potential partners, for the remaining 10 per cent of the available 40 per cent stake in the Lower Zakum concession, and for the remaining 10 per cent stake in the Umm Shaif and Nasr concession. Adnoc retains a 60 per cent majority share in both concessions.
- issacjohn@khaleejtimes.com

Issac John

issacjohn@khaleejtimes.com