The Abu Dhabi National Oil Company (ADNOC) has awarded the exploration rights for Abu Dhabi’s Offshore Block 3 to a consortium led by Eni Abu Dhabi, a subsidiary of Italy’s Eni, and PTTEP MENA, a subsidiary of Thailand’s PTT Exploration and Production
The award has been approved by Abu Dhabi’s Supreme Petroleum Council (SPC), and follows ADNOC’s award earlier in December of an onshore block to Occidental.
His Excellency Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, 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. This validates our targeted approach to value-add partnerships that contribute the right combination of capital, technology, capabilities and market access to accelerate the development of Abu Dhabi’s hydrocarbon resources.
“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.”
Under the terms of the agreement, Eni will operate the exploration phase of the concession, and PTTEP and Eni will collectively hold a 100% stake in the exploration phase, investing up to AED1.51bn (US$412mn) towards exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities in Offshore Block 3.
Following successful commercial discovery during the exploration phase, Eni and PTTEP will, together, have the right to a production concession to develop and produce such commercial discoveries. ADNOC has the option to hold a 60% stake in the production phase of the concession. The term of the production phase is 35 years from the commencement of the exploration phase.
Offshore Block 3 covers an offshore area of 11,660 sq km northwest of Abu Dhabi city. New 3D seismic data has been acquired for a part of the block, which, combined with its proximity to existing onshore oil and gas fields, suggests the concession area has promising potential.
In addition to drilling exploration and appraisal wells, the exploration phase will see Eni and PTTEP leverage and contribute financially and technically to ADNOC’s mega 3D seismic survey, which is already acquiring seismic data within the block area and will be used to identify potential hydrocarbon reservoirs.
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 in 2019, offering a set of major onshore and offshore blocks, on behalf of the SPC. Estimates suggest the blocks in this second bid round hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas, according to ADNOC.
This award comes around a month after the SPC announced the discovery of recoverable unconventional oil resources estimated at 22bn stock tank barrels (STB) and an increase in conventional oil reserves of two billion STB, which boosted the UAE’s conventional reserves to 107bn STB.
