Abu Dhabi National Oil Company (ADNOC) signed two major agreements with French Total, awarding the company 20 percent interest in Umm Shaif and Nasr concessions and 5 percent interest in the Lower Zakum concession. With this, Total joined Italy’s Eni, which was recently acquired a 10 percent stake.
Total contributed a participation fee of $1.15 billion to enter the Umm Shaif and Nasr concessions and a fee of $300 million to enter the Lower Zakum concession, both of which are operated by ADNOC Offshore, an ADNOC subsidiary.
The agreements were signed by ADNOC Group CEO Sultan Ahmed al-Jaber and CEO and Chairman of Total Patrick Pouyanne at the Abu Dhabi Louvre, of a term of 40 years and an effective date of March 9, 2018.
Speaking at the signing ceremony, ADNOC CERO indicated that the agreements fall within the leadership's directives which aims to benefit from Total's experience and knowledge of Abu Dhabi’s offshore oil and gas fields, as well as specialist expertise and technology that will help accelerate the development of the Umm Shaif gas cap.
"ADNOC has recently seen encouraging results from the first gas cap production pilot well at Umm Shaif, which will play an important role in delivering our 2030 smart growth strategy and a sustainable and economic gas supply. At the same time, we both see tremendous opportunities, through this partnership, to create greater value and generate higher returns across our joint activities," he added.
He explained that Total and Abu Dhabi had partnered for over 75 years in the development of oil and gas resources and has closely collaborated with ADNOC across various stages of our value chain.
"Today’s announcement marks an important step to further strengthen our value-adding partnership with one of the world’s largest integrated upstream and downstream companies," concluded Jaber.
Total is ADNOC’s largest and one of its longest international partners and has been active in Abu Dhabi’s oil and gas sector since 1939. It is the fourth largest global oil and gas company with businesses covering the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and international crude oil and product trading.
Total is also considered one of the largest chemicals manufacturers.
For his part, Patrick Pouyanne indicated that the agreements mark a new chapter in Total’s long and successful partnership with Abu Dhabi and ADNOC.
"These agreements ensure Total secures long-term access to significant and competitive hydrocarbon resources that we already know very well. We are committed to working alongside ADNOC and the other concession partners, utilizing our experience gained from the former ADMA offshore concession, to fully realize the potential of both of these new concession areas," reiterated Pouyanne.
Umm Shaif and Nasr concessions and the Lower Zakum concession have been created from the former ADMA offshore concession, which Total has been a partner in since 1953.
ADNOC is divided it into three separate concession areas in order to increase its commercial value, expand technical expertise, and enable products to reach a new market.
Based on ADNOC’s development and initial piloting activities in the gas cap, the concession partners will further pursue the technical and economic evaluation of the development. It plans to process 500 million standard cubic feet of gas per day from Umm Shaif’s gas cap to help meet the growing demand for energy and reduce reliance on imported gas. The condensates, from the gas cap, will be refined to extract higher value products that can be used in a variety of petrochemical applications.
