Adnoc awards two offshore blocks offered in licensing round

14 January 2019
Italian and Thai operators win offshore blocks, marking the start of the awarding process in Abu Dhabi’s first-ever licensing round

Abu Dhabi National Oil Company (Adnoc) has announced awarding two offshore oil and gas blocks, offered in Abu Dhabi’s first-ever licensing round, to Italian energy major Eni and Thailand’s state-owned PTT Exploration & Production Public Company (PTTEP).

The two blocks in the northwest of Abu Dhabi – Offshore 1 and Offshore 2 – are the first to be awarded out of the six blocks that form the licensing round announced in April 2018.

The award of the two blocks, following a competitive bidding process, has been endorsed by Abu Dhabi’s Supreme Petroleum Council (SPC), Adnoc said in its statement.

MEED recently reported that Adnoc would award the two offshore and four onshore blocks within the first quarter of this year.

Under the terms of the agreements, Eni will operate the concessions, and PTTEP and Eni will both hold a 100 per cent stake in the exploration phase.

The operators will invest $230m to explore for oil and gas, and appraise the existing discoveries in Offshore Block 2.

The exploration and appraisal plans for Offshore Block 1 will be finalised by the operators in due course, Adnoc stated.

The two blocks cover a combined area of approximately 8,000 square kilometres.

"Upon successful exploration – and having established the commerciality of the discovered resources – Eni and PTTEP will, together, be granted the opportunity to develop and produce any discoveries, with Adnoc retaining the option to hold a 60 per cent stake in the production phase," the Adnoc statement said.

The exploration phase will also see Eni and PTTEP leverage – and contribute financially and technically to – Adnoc’s mega seismic survey that is capturing high-resolution three-dimensional (3D) images of complex subsurface structures, up to 25,000 feet. These will be used to identify potential hydrocarbon reservoirs.

In July last year, Adnoc awarded $1.6bn-worth of contracts to a subsidiary of China National Petroleum Company (CNPC) to carry out the world’s largest continuous 3D onshore and offshore seismic survey, covering an area of up to 53,000 sq km. This includes the two offshore blocks awarded to Eni and PTTEP.

In addition, the award of a share of the two offshore blocks to Eni provides the Italian company with an opportunity to leverage potential synergies with the neighbouring Ghasha concession, in which Eni was awarded a 25 per cent share in November 2018.

Earlier in 2018, Adnoc also awarded Eni a 10 per cent stake in the Umm Shaif and Nasr offshore concession, and a 5 per cent stake in the Lower Zakum concession. These awards marked the first time an Italian energy company had been granted concession rights in Abu Dhabi’s oil and gas sector.

PTTEP in December last year won two major offshore gas concessions in Thailand, one of which it partnered with Abu Dhabi’s Mubadala Petroleum to bid for.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.