Abu Dhabi awards stakes in two offshore concession stakes to Italy’s Eni


State-owned Abu Dhabi National Oil Co. signed a 40-year oil deal with Italy’s Eni on Sunday offering stakes in two of the emirate’s new offshore oil concessions.

Eni agreed to a total participation fee of Dirhams 3.2 billion (around $875 million) for a 5% stake in the prized Lower Zakum concession and 10% stake in the Umm Shaif and Nasr fields, ADNOC said.

Of the total fee, $575 million was paid for the stake in the Umm Shaif and Nasr concession and $300 million for Lower Zakum.

It is the fourth company to be awarded stakes in the new concessions after the breakup of the original ADMA block, and the first to sign a deal for the Umm Shaif and Nasr concession.

The old ADMA concession, located in the shallow waters of the Persian Gulf, accounts for about a quarter of the UAE’s total oil output and half its crude production from offshore fields. It has now been split into three blocks — Lower Zakum, Umm Lulu and Satah al-Razboot , and Umm Shaif and Nasr.

With its new partners ADNOC hopes to raise output to 1.125 million b/d, from around 700,000 b/d at present.

Umm Lulu, the largest single oil field up for offer, has attracted winning bids from an Indian consortium led by ONGC Videsh, and Japan’s Inpex.

There is now only 15% of the concession available for pickup.

On the other hand, about 30% stake in the Umm Shaif and Nasr concession is still up for grabs.

The deal with Eni, signed by ADNOC CEO Sultan al-Jaber and Eni CEO Claudio Descalzi, followed Italian Prime Minister Paolo Gentiloni’s meeting with Abu Dhabi’s Crown Prince Mohammed bin Zayed.

This is the first time an Italian energy company has been given concession rights in Abu Dhabi’s oil and gas sector.

The award adds a new destination to Eni’s Middle East operations, which include exploration and production in Libya, Iraq, Oman and Egypt.

The agreement diversified ADNOC’s partnership base, while contributing experience, technology, capital and market access, Jabsr said in the statement.

Eni, which produced an average of 1.8 million b/d of crude oil in 2017, has held regular meetings with ADNOC and Mubadala, the emirate’s energy and industry investment vehicle, to discuss opportunities for collaboration in the upstream and downstream sectors.

On Sunday, Eni said it had agreed to sell 10% of its Shorouk concession, off the Egyptian coast in the Mediterranean, to Abu Dhabi’s Mubadala Petroleum for $934 million.

Eni holds a 60% stake in the block, which contains the Zohr field, the biggest gas discovery in the Mediterranean.

“Eni also believes further collaboration with ADNOC in the downstream would create synergies, bringing mutual benefits from capital, resources and knowledge sharing, and would create significant added value to ADNOC’s refining assets,” Descalzi said.

Though discussions have been held with more than a dozen companies, of ADMA’s traditional stakeholders — BP (14.67%), Total (13.33%) and Inpex subsidiary Japan Oil Development Co. (12%) — only the Japanese have retained a stake so far.

BP and Total, which also hold stakes in Abu Dhabi’s onshore concession, renewed in 2016, have not been awarded any stake in the offshore concessions so far.


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