ABU DHABI: Abu Dhabi National Oil Co (Adnoc) received bids in the fourth quarter from international energy companies seeking stakes in offshore fields that pump about 25 per cent of the UAE capital’s crude.
Adnoc is reviewing commercial bids from the companies it will choose from to help develop the deposits in a new joint venture, Adnoc said in response to questions.
Adnoc didn’t identify the bidders or say when it would make a decision. The existing venture expires in March.
Plans to expand production at the offshore block are part of Abu Dhabi’s effort to raise output capacity to 3.5 million barrels a day later this year from about 3.15 million currently. The new contracts will govern operations at the deposits for several decades. The fields currently produce about 700,000 barrels a day, with a target to pump 1 million barrels a day by 2021.
Middle Eastern producers are trying to wring more crude from ageing fields. With global demand seen rising about 2 per cent this year to about 100 million barrels a day, producers such as Abu Dhabi are turning to international partners, increasingly from oil-importing countries in Asia, to help boost their capacity to meet future demand. Abu Dhabi holds about 6 per cent of global crude reserves.
Under the contract for the new venture, international companies will no longer receive a fixed fee for each barrel of oil they produce, according to people with knowledge of the situation. Instead, the partners will receive shares of the oil produced at the fields and any profit from sales of the crude minus costs, taxes and royalties paid to the government, said the people, who asked not to be identified because the discussions are confidential.
In another change, the single offshore block will be divided into three parts, the people said. One area will contain the Lower Zakum field, a second will include the Umm Shaif and Nasr deposits and the third will comprise the Satah Al Razboot and Umm Lulu fields, they said. Adnoc didn’t comment about the new contract structure or the three-way partitioning of the block. Adnoc owns 60 per cent of the current partnership managing the fields, Abu Dhabi Marine Operating Co, known as Adma-Opco. BP holds 14.67 per cent of the venture, while Total SA owns 13.33 per cent and Inpex Corp of Japan has 12 per cent.
Inpex is interested in the new concession and is in negotiations, Tokyo-based spokesman Carlo Niederberger said by phone, without confirming whether it had submitted a bid. BP, Total, Statoil ASA and China National Petroleum Corp. are among companies that have expressed interest.
Meanwhile, Adnoc LNG is expected to award the EPC contract for phase II of the expansion of its integrated gas development (IGD) project by September this year, said Vinod Thakur, contract manager at Adnoc LPG. The company is an arm of Adnoc.
With regards to project financing, Thakur shared that the project is being financed by Adnoc itself. The project cost is estimated to be around $450 milion, as per industry metrics.
Tecnicas Reunidas SA, Petrofac Limited, National Petroleum Construction Company (NPCC), and Maire Tecnimont SpA had submitted their bids for the project.
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