ADNOC and Eni signed two historic agreements yesterday that awards Italy’s multinational oil and gas company Eni stakes in two of Abu Dhabi’s offshore concession areas for US$875 million in participation fees.
Under the terms of the agreements, Eni has been awarded a 10 per cent interest in the Umm Shaif and Nasr concession and a 5 per cent interest in the Lower Zakum concession. The agreements terms are for 40 years, backdated to March 9, 2018.
The awards mark the first time an Italian energy company has been given concession rights in Abu Dhabi’s oil and gas sector.
His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the United Arab Emirates Armed Forces, and His Excellency Paolo Gentiloni, Prime Minister of Italy, were present for the signing between His Excellency Dr. Sultan Ahmed Al Jaber, ADNOC Group Chief Executive Officer, and Claudio Descalzi, CEO of Eni.
Eni contributed a participation fee of AED 2.1 billion (US $575 million) to enter the Umm Shaif and Nasr concession and a fee of AED 1.1 billion (US $300 million) to enter the Lower Zakum concession. Both concessions will be operated by ADNOC Offshore, a subsidiary of ADNOC, on behalf of all concession partners.
H.E. Dr. Al Jaber said: “These agreements underline the international market’s confidence in ADNOC’s long-term growth plans and the UAE’s stable and reliable investment environment. They also broaden and diversify our partnership base, in line with the leadership’s directives, while contributing experience, technology, capital and market access.
“Our partnership with Eni, and other concession partners, will enable us to accelerate our growth, increase revenue and improve integration across the upstream value chain, as part of our ongoing transformation and build on the foundations that have been laid to deliver a more profitable upstream business.
“With these agreements, ADNOC continues to leverage its 46-year legacy of successful energy partnerships, in support of its 2030 strategy. They will enhance its ability to capitalize on key trends which are driving growing energy demand and ensure ADNOC continues to deliver long-term, robust and sustainable returns for the nation’s benefit,” H.E. Dr. Al Jaber added.
Descalzi said: “Eni is committed to apply its experience in the development and production of world-class oil and gas resources, as well as Eni’s technology portfolio, in support of ADNOC’s objectives to cost-effectively increase production capacity, efficiently manage the concessions’ assets and sustain the plateau through targeted enhanced oil recovery programs, at competitive cost.
“Eni also believes further collaboration with ADNOC in the downstream would create synergies, bringing mutual benefits from capital, resources and knowledge sharing, and would create significant added value to ADNOC’s refining assets.”
The Umm Shaif and Nasr, and Lower Zakum concessions, along with the SARB and Umm Lulu concession areas, have been created from the former ADMA offshore concession, with the aim of maximising commercial value, broadening the partner base, expanding technical expertise, and enabling greater market access.