On behalf of the Abu Dhabi government, the Abu Dhabi National Oil Company (ADNOC) has signed an agreement with Cepsa, a Spanish integrated oil and gas company, awarding it a 20 per cent stake in offshore SARB and Umm Lulu concession
The choice of Cepsa, which is wholly-owned by Abu Dhabi’s Mubadala Investment Company and operates across the entire oil and gas value chain, underpins ADNOC’s strategy to maximise returns from its resources, expand its downstream business and retain value for the UAE.
The concession area is made up of two main fields under development, Umm Lulu, which is part of the former ADMA offshore concession, and SARB, as well as two smaller fields, Bin Nasher and Al Bateel. The ADMA concession has been split into three new concessions to maximise commercial value, broaden ADNOC’s partner base, expand technical expertise and enable greater market access.
Cepsa has contributed a participation fee of US$1.5bn to enter the concession, which also takes into account previous ADNOC investments in the concession area. ADNOC retains a majority of 60 per cent stake in the concession that will be operated by ADNOC Offshore, a subsidiary of ADNOC.
The agreement, which has a term of 40 years and an effective from 9 March 2018, was signed by Dr Sultan Ahmed Al Jaber, froup CEO of ADNOC, and Pedro Miró, vice-chairman and CEO of Cepsa.
Dr Al Jaber said, “This long-term agreement is a milestone in the development of Abu Dhabi’s integrated oil and gas sector and in the delivery of ADNOC’s 2030 smart growth strategy. This partnership ensures we continue to maximise value from our hydrocarbon resources, in line with the leadership’s directives, by capturing that value and financial return here in the UAE.”
Miro said, “This concession agreement marks an important moment for Cepsa and our close relationship with ADNOC, with whom we are working with on a number of projects in the upstream, downstream and petrochemical sectors. It will add substantial reserves, in a concession with relatively low production cost, to our portfolio, and will enable us to make considerable strides towards achieving our objectives, as set out in our 2030 Strategic Plan.”
In support of its expanded 2030 strategy, ADNOC plans to grow its crude refining capacity by 60 per cent and more than triple its petrochemical production, to 14.4 mtpa by 2025, through a staged expansion plan aimed at initially optimising its existing assets to grow and diversify its products portfolio.
