Oxy pays $310 million for Dolphin stake

07 June 2002

The US' Occidental Petroleum Corporation has paid $310 million for the acquisition of a 24.5 per cent stake in Dolphin Energy (DEL), the company announced at the 2 June signing of a partnership agreement with Abu Dhabi-based UAE Offsets Group (UOG- MEED 10:5:02).

Occidental has effectively replaced Enron Corporation, also of the US, which withdrew from the Dolphin gas project in May 2001.

With the signing of the agreement, DEL's shareholders are UOG with a 51 per cent stake and Occidental and France's TotalFinaElf, each with 24.5 per cent.

In early May, UOG announced the selection of Occidental as its second strategic partner in DEL, the venture responsible for carrying out the $3,500 million gas project. The selection came a month after five international oil companies submitted separate bids for a 24.5 per cent and a 20 per cent stake in DEL (MEED 12:4:02).

'Occidental Petroleum was selected partly for its track record in the Middle East and partly for what it has agreed to put into the joint venture - investment, secondment, training and focused long-term commitment,' said Ahmed al-Sayegh, a member of DEL's board of directors.

UOG also announced in late May that the government of Abu Dhabi had issued an emiri decree approving the establishment of Jersey-registered DEL as a commercial company in the UAE. Under the decree, DEL has been granted exclusive rights to import gas to meet the demands of Abu Dhabi Water & Electricity Authority (ADWEA) and Dubai Supply Authority (Dusup).

DEL has also received approval to use the existing natural gas distribution network owned and operated by Abu Dhabi National Oil Company and to develop an independent network. DEL plans to import up to 3,000 million cubic feet a day of natural gas from Qatar's North field. A large volume of the imported gas will be used as feedstock by ADWEA for its existing and future power and desalination plants.

DEL is aiming to firm up by September its gas sales agreements with ADWEA, Dusup and Union Water & Electricity Company.

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