The Abu Dhabi National Oil Company (ADNOC) said France’s Total has been awarded stakes in two of Abu Dhabi’s new offshore concessions for a total of US$1.45 billion.
Total was awarded a 20 per cent interest in the Umm Shaif and Nasr concession in exchange for a participation fee of AED 4.2 billion ($1.15 billion) a 5 per cent interest in the Lower Zakum concession for AED 1.1 billion ($300 million), ADNOC said in a statement.
Both concessions are operated by ADNOC Offshore, a subsidiary of ADNOC, on behalf of all concession partners.
The agreements, which have a term of 40 years and an effective date of March 9, 2018, were signed by Dr Sultan Ahmed Al Jaber, ADNOC Group chief executive officer, and Patrick Pouyanné, chairman and CEO of Total.
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. Based on ADNOC’s development and initial piloting activities in the gas cap, the concession partners will further pursue the technical and economic evaluation of the development.
The gas cap overlays an oil rim which, in combination with Nasr, has a crude production capacity of 460,000 bpd. 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.
In the Lower Zakum concession, Total joins an Indian consortium, led by ONGC Videsh, Japan’s INPEX, as well as Eni as stakeholders. ADNOC is finalizing 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.
“For over 75 years Total has partnered with Abu Dhabi in the development of our oil and gas resources and has closely collaborated with ADNOC across various stages of our value chain,” said Dr Sultan Al Jaber. “Today’s announcement marks an important step to further strengthen our value-adding partnership with one of the world’s largest integrated upstream and downstream companies.”
The Umm Shaif and Nasr concession and the Lower Zakum concession have been created from the former ADMA offshore concession, which Total has been a partner in since 1953. It has been divided into three separate concession areas with the aim of maximising commercial value, broadening the partner base, expanding technical expertise, and enabling greater market access.
“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. 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,” Al Jaber added.
Total said the group’s equity production in 2017 in the Emirates was 290,000 boe/d. It Total held a 13.3 per cent interest in the 65-year ADMA concession that expired on March 8, 2018.
In partnership with ADNOC, Total holds, in addition to the new Umm Shaif & Nasr (20 per cent) and Lower Zakum (5 per cent) participating interests:
-10 pct in the 40-year ADNOC Onshore concession (former ADCO)
-15 pct in ADNOC Gas Processing (former GASCO)
-5 pct in ADNOC LNG (former ADGAS)
-5 pct in the National Gas Shipping Company (NGSCO)
-33.33 pct in ADNOC Fertilizer (former FERTIL)
In partnership with Mubadala, a company owned by the government of Abu Dhabi, Total holds a 24.5 per cent stake in Dolphin Energy Ltd.
In addition, Total owns 100 per cent stake and operates the Abu Al Bu Koosh field.