Abu Dhabi National Oil Company (Adnoc) has awarded Onshore Block 3 – located within the hydrocarbons acreage offered to foreign explorers in Abu Dhabi’s first-ever licensing round – to US-based exploration and production (E&P) company Occidental Petroleum (Oxy).
Under the terms of the agreement, Oxy will hold a 100 per cent stake in the exploration phase, investing $244m, including a participation fee, to explore for oil and gas in Onshore Block 3.
The award of the 35-year concession agreement to Oxy for the onshore block has been endorsed by Abu Dhabi’s Supreme Petroleum Council, Adnoc said in a statement.
Onshore Block 3 covers an area of 5,782 square kilometres in the Al-Dhafra region.
Existing 3D seismic data already covers a large part of the block, which, combined with its proximity to the Shah, Asab, Haliba and Sahl fields, suggests the concession area has "very promising potential", Adnoc said.
Onshore Block 3 is the first onshore block to be awarded in the geographical areas offered for commercial bidding by Adnoc in April 2018.
Adnoc in January awarded Italy’s Eni and Thailand’s PTTEP operatorship of Offshore Blocks 1 and 2, the only two offshore areas offered in the licensing round.
"Upon successful exploration – and having established the commerciality of the discovered resources – Occidental will be granted the opportunity to develop and produce any discoveries," Adnoc said.
Adnoc has the option to hold a 60 per cent stake in the production phase of the concession.
Oxy already has a partnership with Adnoc in the sour gas field development and processing space, through Adnoc Sour Gas. The Adnoc subsidiary, formed in 2010, is a 60:40 joint venture between Adnoc and Oxy, to extract and process sour gas from the onshore Shah gas field.
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