The US’ ExxonMobil Corporation is understood to be close to signing a final agreement with Abu Dhabi National Oil Company (ADNOC) on the development of the offshore Upper Zakum oil field (UAE, MEED Special Report, 2:12:05, page 46).

‘The [official] deal is expected to be signed in January, as all major issues have now been resolved,’ says a Gulf-based industry executive. The US energy giant has declined to comment on the deal. However, an ExxonMobil spokesperson said in late November: ‘We were selected to negotiate with ADNOC due to our industry-leading technology.’

Greater access to development technology to field operator Zakum Development Company (Zadco) is understood to have been a sticking point in the signing of a final agreement. The issues under discussion were advanced technology, particularly in sub-surface technological applications, increasing production and overcoming future technical challenges.

In April, ExxonMobil was selected by Abu Dhabi’s Supreme Petroleum Council to start exclusive negotiations for a partnership in the field due to its best technical offer. The other bidders were the UK’s BP and the Royal Dutch/Shell Group. Under the deal, ExxonMobil will take a 28 per cent equity stake in Zadco, with ADNOC retaining 60 per cent and Japan Oil Development Company (Jodco) holding the remaining 12 per cent interest. At present, Zadco is 88 per cent owned by ADNOC, while Jodco has a 12 per cent interest.

The Upper Zakum field started production in the mid-1980s with capacity of 350,000 barrels a day (b/d). With estimated reserves of about 45,000 million barrels – about 46 per cent of Abu Dhabi’s total of 98,000 million barrels – the field has production capacity of 550,000 b/d. Zadco aims to raise production levels to 750,000 b/d through a major investment programme.

Bids were submitted in late November for the position of project manager for a major gas reinjection and treatment project, besides a major debottlenecking scheme (MEED 2:12:05).