Abu Dhabi National Oil Company (ADNOC) announced on Monday the signing of an exploration concession agreement with a consortium led by Eni Abu Dhabi, a subsidiary of Italy’s energy giant, and PTTEP MENA, a unit of Thailand’s PTT Exploration and Production Public Company Limited (PTTEP).
The award of exploration rights for Abu Dhabi’s Offshore Block 3 has been approved by Abu Dhabi’s Supreme Petroleum Council (SPC) and follows ADNOC’s award earlier this month of an onshore block to US-based Occidental.
The exploration concession agreement was signed by Dr Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and ADNOC Group CEO, Claudio Descalzi, CEO of Eni and Phongsthorn Thavisin, CEO of PTTEP.
Al Jaber said: “This concession award reinforces ADNOC and Eni’s growing partnership across our value chain and deepens our relationship with Thailand’s PTTEP, one of the key markets for our crude oil and products.
“Despite volatile market conditions, we are making very good progress in delivering Abu Dhabi’s second competitive block bid round, underscoring our world-class resource potential and the UAE’s stable and reliable investment environment. We continue to welcome partners that share our vision to sustainably unlock value from our hydrocarbon resources for our mutual benefit, as we deliver on our 2030 strategy and enable long-term returns to the UAE.”
Under the terms of this agreement, Eni will operate the exploration phase of the concession, and PTTEP and Eni will collectively hold a 100 percent stake in the exploration phase, investing up to AED1.51 billion ($412 million).
A statement said that following successful commercial discovery during the exploration phase, Eni and PTTEP will have the right to a production concession to develop and produce such commercial discoveries.
ADNOC has the option to hold a 60 percent stake in the production phase of the concession which spans 35 years from the commencement of the exploration phase.
Offshore Block 3 covers an offshore area of 11,660 square kilometres northwest of Abu Dhabi city.
Dr Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and ADNOC Group CEO
In January 2019, a consortium led by Eni and PTTEP was awarded two offshore blocks in Abu Dhabi’s first competitive bid round. The consortium continues to explore for oil and gas in the blocks known as Offshore 1 and Offshore 2, located northwest of Abu Dhabi city.
ADNOC launched Abu Dhabi’s second competitive block bid round last year, offering a set of major onshore and offshore blocks, on behalf of the SPC.
This latest award comes a month 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.
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