The Abu Dhabi National Oil Company (ADNOC) is in advanced discussions with more than a dozen potential partners who have expressed a significant interest in the offshore concession, currently operated by the Abu Dhabi Marine Operating Company (ADMA-OPCO), that expires next March.
The potential partners are a mix of existing concession holders in ADNOC’s offshore fields and new participants, the company informed on Monday.
The announcement comes shortly after ADNOC unveiled the expansion of its strategic partnership model, as well as the active management of its portfolio of assets.
ADNOC’s new approach, which builds on its 2030 growth strategy, will enable the company to unlock and maximize value from across the group. The new approach will deliver improved revenue streams and ensure smart growth, ADNOC explained.
The existing ADMA-OPCO concession will be split into two, or more, concessions with new terms to unlock greater value and increase partnership opportunities. The concession will be comprised of a mix of the Lower Zakum field, Umm Shaif, Nasr, Umm Lulu and Satah Al Razboot (SARB) fields. ADNOC, on behalf of the Abu Dhabi government, will retain a 60% shareholding in the new concession areas.
Dr Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of ADNOC, said: “We have received great interest in the concessions from both existing and potential new partners. Discussions are progressing well and companies have been drawn by our stable investment environment and ADNOC’s reliability as a partner, as well as the attractive and sustainable returns that will be generated.
“As part of ADNOC’s new partnership approach, we look forward to working with partners who will bring new and innovative thinking to the table. Partners who can demonstrate tangible value-add to our operations through technology, expertise, long term capital and market access, as well as a shared commitment to drive operational performance and efficiency to deliver smart growth and strong financial returns. Our ideal partners should also be willing to invest across different parts of our value chain,” Dr Al Jaber added.
According to the company, interest in the new concession areas is being driven by, among other things, the stable investment climate in the UAE and the UAE’s low production costs.
Following ADNOC’s 2016 announcement to consolidate the offshore operations of ADMA-OPCO and the Zakum Development Company (ZADCO), the new ADMA 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 the end of the year.
ADNOC is looking to boost its oil production capacity to 3.5m bpd in 2018, with offshore development as a strategic focus of the company. The existing concession area operated by ADMA-OPCO, which produces around 700,000 barrels a day of oil, is planned to have a production capacity of about 1 million barrels per day by 2021.
In its gas business, ADNOC stated it will develop a variety of natural gas sources, including tapping into gas caps and undeveloped deep and sour gas reserves.
Existing shareholders in ADMA-OPCO are BP (14.67%), Total (13.33%) and JODCO (12%). The international shareholders in ZADCO are ExxonMobil (28%) and JODCO (12%). The Abu Dhabi Government, through ADNOC, has a 60% interest in both operating companies.