The Abu Dhabi National Oil Company (ADNOC) has signed an exploration concession agreement, awarding the exploration rights for Abu Dhabi Onshore Block 5 to Occidental, a US-based international oil and gas exploration and production company
The award was approved by Abu Dhabi’s Supreme Petroleum Council (SPC) and follows the SPC’s endorsement last month for ADNOC to begin awarding exploration blocks in Abu Dhabi’s second competitive block bid round.
This award to Occidental represents a further deepening of the UAE-USA strategic bilateral relationship and the continued expansion of ADNOC’s strategic partnerships with those who can provide technology and capabilities, capital and access to key growth markets for the company’s crude oil and products.
Occidental will hold a 100% stake in the exploration phase, investing up to AED 514 million (US$140mn), including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an onshore area of 4,212 sqkm southeast of Abu Dhabi city. New 3D seismic data has been acquired over a large part of the block, which combined with its proximity to the existing onshore oil and gas fields, suggests the concession area has promising potential.
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 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. Onshore Block 5 offers the potential to create significant in-country value for the UAE over the lifetime of the concession.
Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said, “The award underscores the attractiveness of Abu Dhabi’s huge untapped resource potential and ADNOC’s ability to continue to secure foreign direct investment to the UAE’s stable and trusted business environment, despite tough market conditions.
“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. This onshore block offers new areas with significant amounts of conventional oil and gas potential, and the award signals ADNOC and Abu Dhabi’s drive to remain a long-term and reliable energy provider to the world.”
In addition to drilling exploration and appraisal wells, the exploration phase will see Occidental leverage and contribute financially and technically to ADNOC’s mega seismic survey, which is already acquiring seismic data within the block area.
