The tender for Abu Dhabis onshore oil concession has been called the biggest upstream prize available for international oil companies (IOCs) in the Middle East.
Established producers Saudi Arabia and Kuwait have state-controlled monopolies on upstream assets, and Qatar and Oman have a few major oil blocks up for grabs, while IOCs in Iraq are largely building on concessions already awarded over the past decade.
The existing capacity of Abu Dhabis onshore fields is about 1.6 million barrels a day (b/d), making the concession a bigger crude producer than Opec members such as Algeria, Libya and Qatar.
Of the nine companies competing for shares in the new 40-year-long Abu Dhabi Company for Onshore Petroleum Operations Limited (Adco) joint venture, only Total has announced involvement in the operations. The French group won 10 per cent plus asset leader of Bu Hasa and the southeast fields including Asab.
These fields combined have an estimated capacity of almost 1.1 million b/d Bu Hasa and Asab are the largest two producing assets or the equivalent of about two-thirds of Adcos total capacity.
It appears Total has won the lions share of the fields, with those still to be awarded including Bab (the third-largest) and the North East Bab asset that comprises three smaller fields close to Abu Dhabi city.
An important question is whether the other bidders will be prepared to take a smaller amount of production assets on similar terms to the deal received by Total. According to analysts, the fee structure includes additional payments for being the asset leader of specific fields.
In the previous Adco concession, the IOCs were paid a flat fee of $1 for each barrel produced, which was considered a very low margin despite the relatively small operating costs of the emirates onshore fields.
For now, it remains unclear whether Adnoc has still to decide which IOCs to award shares to in the field or if several selected IOCs are still weighing up the terms of existing offers.