UAE's ADNOC awards Total stakes in two offshore concessions

Elias Hubbard
March 19, 2018

Abu Dhabi National Oil Company has awarded stakes in two offshore concessions to France's total for Dhs5.3bn ($1.45bn), according to UAE state news agency WAM.

As part of the deals, Total has been granted a 20 percent interest in the Umm Shaif & Nasr concession and a five percent stake in the Lower Zakum concession offshore Abu Dhabi, effective March 9, for a total participation fee of $1.45 billion.

ADNOC's chief executive and ministry of state Sultan bin Ahmad Sultan Al Jaber was confirmed to have signed the forty-year concession together with Total's chairman Patrick Pouyanne.

Total, which produced approximately 2.5 million b/d in 2017, is the largest worldwide oil company to agree terms with Abu Dhabi so far.

Located about 65km off the coast of Abu Dhabi, the Lower Zakum field commenced production in 1967.

In the Umm Shaif and Nasr concession, Total joins Italy's Eni, which was recently awarded a 10% stake. Adnoc will retain a 60 per cent stake across the various split concessions, with the remainder shared between various partners. 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.

Other investors in the Lower Zakum segment include an Indian consortium led by ONGC Videsh and Japan's Inpex. These interests bring to Total a production of 80,000 barrels of oil per day in 2018.

Total was awarded a 20% interest in the Umm Shaif and Nasr concession, along with a 5% stake in the Lower Zakum field, the largest offshore field up for offer, ADNOC announced in a statement Sunday. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and global crude oil and product trading. Both concessions are being operated by Adnoc Offshore on behalf of all concession partners.

Pouyanné said the new deals marked a new chapter in Total's long and successful partnership with Adnoc.

The concession partners will work on ADNOC's initial pilot activities to process 500 MMcf/d of gas from Umm Shaif's gas cap to help meet Abu Dhabi's growing domestic demand for energy and reduce reliance on imported gas. 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 has targeted doubling of refining and tripling its petchems capacities respectively by 2025, in order to increase its margins from the sale of higher-value products.

Other reports by Click Lancashire

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