Eni has signed two concession agreements to acquire five per cent stake in the Lower Zakum offshore oil field and 10 per cent stake in the oil, condensate and gas offshore fields of Umm Shaif and Nasr in Abu Dhabi
The acquisitions come for a total participation fee of about US$875mn for a period of 40 years.
The signing ceremony was attended by Mohamed bin Zayed Al Nahyan, crown prince of Abu Dhabi and deputy supreme commander of the UAE armed forces, the Italian Prime Minister, Paolo Gentiloni, Dr Sultan Ahmed Al Jaber, CEO of ADNOC Group and CEO of Eni, Claudio Descalzi.
The agreements represent a strategic move for Eni gaining access to a country with hydrocarbons reserves among the largest in the world.
Lower Zakum is located about 65km off the coast of Abu Dhabi. The discovery dates back to 1963 and production began in 1967. It has a target production of 450,000 bpd. Umm Shaif and Nasr are located about 135km from the coast of Abu Dhabi and have a target production of 460,000 bpd.
Descalzi commented, “I'm very pleased about this agreement creating a larger presence for Eni in Middle East, in line with our expansion strategy, and creating a strong alliance with ADNOC and Abu Dhabi. The stakes in the two concessions give access to giant fields with huge potential and Eni is willing to contribute its best technology to maximise the future production.”
The partnership is expected to enable ADNOC to accelerate growth, increase revenue and improve integration across the upstream value chain, as part of its ongoing transformation and build on the foundations that have been laid to deliver a more profitable upstream business.
Commenting on the partnership, Tom Quinn, a senior analyst on Wood Mackenzie’s Middle East Upstream team, said, “This is the first award by ADNOC to a major (in the offshore renewal), and shows it is looking to find a balance in its strategic partners between companies from major buyers, such as Japan and India, and IOCs with technology and project delivery expertise.”
