Abu Dhabi National Oil Company (ADNOC) announced on Wednesday the signing of an exploration concession agreement with Occidental, a US-based international oil and gas major.
The award of the exploration rights for Abu Dhabi Onshore Block 5 has been approved by Abu Dhabi’s Supreme Petroleum Council (SPC), state news agency WAM reported.
The award comes a few weeks after the SPC announced the discovery of recoverable unconventional oil resources estimated at 22 billion stock tank barrels (STB), and an increase in conventional oil reserves of 2 billion STB which boosted the UAE’s conventional reserves to 107 billion STB.
Occidental said it will hold a 100 percent stake in the exploration phase, investing up to AED514 million ($140 million), including a participation fee.
The block covers an onshore area of 4,212 sq km southeast of Abu Dhabi city.
Following a successful commercial discovery during the exploration phase, Occidental will have the right to a production concession to develop and produce such commercial discoveries.
ADNOC said it has the option to hold a 60 percent stake in the production phase of the concession which has a term of 35 years from the commencement of the exploration phase.
Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said: “We are very pleased to once again collaborate with Occidental and strengthen our long-standing partnership. This concession award highlights the important role of energy cooperation in deepening the strong and deep-rooted strategic relationship between the UAE and the US.
“Occidental was selected after a very competitive bid round that builds on the success of our debut bid round completed last year as part of Abu Dhabi’s block licensing strategy aimed at accelerating the exploration and development of our substantial hydrocarbon resources.”
ADNOC Group CEO Dr Sultan Ahmed Al Jaber (left), and Vicki Hollub, president and CEO of Occidental
Vicki Hollub, president and CEO, Occidental, said: “We see significant potential in Onshore Block 5 and, in partnership with ADNOC, will continue to work to help unlock the vast untapped resources in Abu Dhabi.”
ADNOC launched Abu Dhabi’s second competitive block bid round in 2019, offering a set of major onshore and offshore blocks on behalf of Abu Dhabi’s Supreme Petroleum Council.
In February 2019, Occidental was awarded an onshore block in Abu Dhabi’s first competitive bid round. Occidental continues to explore for oil and gas in the block known as Onshore Block 3 that covers an area of 5,782 sq km in the Al Dhafra region of Abu Dhabi.
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