Wintershall joins UAE sour gas development

26 November 2018
Field is expected to produce more than 1.5 billion cubic feet of gas a day (cf/d) when it comes on stream

Abu Dhabi has awarded Germany’s Wintershall a 10 per cent stake in its new multibillion-dollar offshore Ghasha sour gas concession, where it joins Italian oil and gas major Eni.

The new 40-year Ghasha concession includes the Hail, Ghasha, Dalma offshore fields. Other fields include Nasr, Satah al-Razboot and Mubarraz.

State-owned Abu Dhabi National Oil Comapny (Adnoc) holds the majority stake of 60 per cent. Eni has a 25 per cent stake and bears an equal share of the project’s development costs. Wintershall will also contribute 10 per cent of the project capital and operational development expenses, Adnoc said in a statement.

Only 5 per cent of the concession is left open for other international oil company partners.

The project aims to tap into Abu Dhabi’s Arab basin, which is estimated to hold multiple trillions of standard cubic feet of recoverable gas, though it is technically challenging due to its high sulphur content.

The project is expected to produce more than 1.5 billion cubic feet of gas a day (cf/d) when it comes on stream around the middle of the next decade. This would provide enough gas to power more than two million homes, Adnoc says.

It will also produce over 120,000 barrels a day (b/d) of oil and high value condensate.

While the UAE has long been a major crude oil producer, with capacity set to reach 3.5 million barrels a day (b/d) by the end of 2018, the country has long relied on imported gas for power generation.

The latest concession award follows the approval of Adnoc’s new gas strategy by the emirate’s Supreme Petroleum Council earlier this month, which includes a capital spending plan of $132bn between 2019-2023.

The plan will help Adnoc reach its goal of boosting its oil production capacity to 4 million b/d by the end of 2020 and 5 million b/d by 2030, while also helping the UAE become self-sufficient in gas and eventually become a net exporter.

These include plans to boost production from its Shah sour gas field to 1.5 billion cf/d and moving ahead with the development of the Bab and Bu Hasa fields. Abu Dhabi is also looking to unlock the gas caps above its oil fields and unconventional gas reserves.

Total was awarded a 40 per cent stake in Abu Dhabi’s unconventional Ruwais Diyab gas concession on 11 November, under which it will explore, appraise and develop the concession area’s gas resources.

Wintershall, a subsidiary of BASF, is Germany’s largest crude oil and natural gas producer. The stake marks the first time a German oil and gas company has joined an Adnoc concession, although Wintershall it is already working on Abu Dhabi’s Shuwaihat sour field.

The company is in the midst of a merger with DEA, another German operator with assets in Algeria and Egypt. Wintershall hopes that move will make it Europe’s biggest independent oil and gas producer, targeting 800,000 barrels of oil equivalent a day (boe/d) in the next five years, up from just under 600,000 boe/d currently.

The merger is expected to be completed in September.

It has drilled two appraisal wells at the Shuwaihat sour field, which lies just a few kilometres off the coast of Shuwaihat island in the Gulf. It is now in discussions with Adnoc about how the field fits into Abu Dhabi’s wider gas plans. This could involve integrating Shuwaihat into a larger development with the other fields, company executives said earlier this month.

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