Abu Dhabi National Company (ADNOC) said on Wednesday it had signed an exploration concession agreement with Occidental Petroleum Corp (Oxy) for onshore Block 5.
ADNOC CEO Sultan Al Jaber said the deal strengthens the company’s long-standing partnership with Oxy.
“Crucially, 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,” he added.
“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,” he continued.
Occidental will have a 100 percent stake in the exploration phase and will invest up to AED514 million dirhams (USD140 million), including a participation fee, it said.
The block covers 4,212 square km southeast of Abu Dhabi city.
New data covering a large part of the block, along with its proximity to existing onshore oil and gas fields, suggests the area has “promising potential”, ADNOC said.
Occidental will have the right to a production concession following a successful commercial discovery, with ADNOC having the option to hold a 60 percent stake in the concession. The production period is for 35 years from the start of exploration.
“We are honored to partner with ADNOC on a second exploration concession contiguous to Onshore Block 3, where we have completed two exploration wells with extremely promising results. We see significant potential in Onshore Block 5 and, in partnership with ADNOC, will continue to work to help unlock the vast untapped resources in Abu Dhabi,” said Oxy’s CEO Vicki Hollub.
ADNOC launched Abu Dhabi’s second competitive block bid round in 2019, offering a set of major onshore and offshore blocks, on behalf of Abu Dhabi’s Supreme Petroleum Council (SPC).
Based on existing data from detailed petroleum system studies, seismic surveys, exploration and appraisal wells data, estimates suggest the blocks in this second bid round hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas.
