ADNOC furthers concession split, increases partnership prospects

Abu Dhabi National Oil Co. (ADNOC) is working to boost oil production to 3.5 million b/d in 2018 with offshore development being its primary focus.

Abu Dhabi National Oil Co. (ADNOC) is working to boost oil production to 3.5 million b/d in 2018 with offshore development being its primary focus.

The company announced in July that it is expanding its partnership model to open more concession opportunities (OGJ Online, July 10, 2017). The new approach targets market access, long-term capital, and technological expertise to deliver growth. Abu Dhabi Marine Operating Co. (ADMA-OPCO) operates Abu Dhabi’s offshore concession, which expires in March 2018, and ADNOC is in advanced discussions with more than a dozen potential partners who have expressed an interest, including a mix of existing concession holders in ADNOC’s offshore fields and new participants. ADMA-OPCO produces 700,000 b/d of oil, and is expected to increase production to 1 million b/d by 2021.

The existing ADMA-OPCO concession will be split into two or more new concessions with new terms, and will be comprised of a mix of Lower Zakum, Umm Shaif, Nasr, Umm Lulu, and Satah Al Razboot (SARB) fields. ADNOC will retain 60% interest in the new concession areas.

ADNOC announced in 2016 its effort to consolidate ADMA-OPCO offshore operations and Zakum Development Co. (ZADCO) (OGJ Online, Oct. 10, 2016). The new ADMA-OPCO concessions and the existing Upper Zakum concession, operated by ZADCO, will be operated by the new integrated offshore company. The consolidation of the two companies is due to be completed before yearend.

The company said expansion of its partnership model is part of its “ADNOC 2030” strategy, which envisions higher oil production capacity and innovation in enhanced oil recovery, expansion of petrochemical production to 11.4 million tonnes/year by 2025 from the current 4.5 million tpy, and further development of natural gas resources.

Existing shareholders in ADMA-OPCO are BP PLC 14.67%, Total SA 13.33%, and Japan Oil Development Co. (JODCO) 12%. The international shareholders in ZADCO are ExxonMobil Corp. 28% and JODCO 12%. The Abu Dhabi government, through ADNOC, has a 60% interest in both operating companies.

Contact Tayvis Dunnahoe at tayvisd@ogjonline.com.

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