PetroChina and ADNOC Sign Offshore Concessions
Monday 26 March 2018
PetroChina Company Limited has been awarded stakes in Abu Dhabi’s two offshore oilfield concessions following the signing of agreements with the Abu Dhabi National Oil Company (ADNOC).
Under the terms of the agreements, PetroChina Company Limited has been granted a 10% interest in the Umm Shaif and Nasr concession and a 10% interest in the Lower Zakum concession. In February 2017, PetroChina’s parent company China National Petroleum Corporation (“CNPC”) was awarded an 8% interest in Abu Dhabi’s onshore concession, operated by ADNOC Onshore. CNPC also has a 40% stake in the Al Yasat concession with ADNOC.
PetroChina contributed a participation fee of AED 2.1 billion (US $575 million) to enter the Umm Shaif and Nasr concession and a fee of AED 2.2 billion (US $600 million) to enter the Lower Zakum concession. Both concessions will be operated by ADNOC Offshore, on behalf of all concession partners.
The agreements were signed, in Abu Dhabi, by Dr. Sultan Ahmed Al Jaber, ADNOC Group CEO and Mr. Wang Yilin, Chairman of CNPC. The agreements have a term of 40 years and are backdated to March 9, 2018.
The Umm Shaif and Nasr concession and the Lower Zakum concession have been created from the former ADMA offshore concession, with the aim of maximising commercial value, broadening the partner base, expanding technical expertise, and enabling greater market access.
The Umm Shaif field’s Arab reservoir is characterised by a huge gas cap – one of the largest in the region - with reserves rich in condensates. The gas cap overlays an oil rim which, in combination with Nasr field, has a crude production capacity of 460,000 bpd. ADNOC plans to process 500 million standard cubic feet of gas per day from Umm Shaif’s gas cap to help meet Abu Dhabi’s growing domestic demand for energy and reduce reliance on imported gas. The gas cap’s condensates will be refined to extract higher value products that can be used in a variety of petrochemical applications.
PetroChina joins Eni (10%) and Total (20%) as participants in the Umm Shaif and Nasr concession; and an ONGC Videsh led consortium (10%), INPEX Corporation (10%), Eni (5%) and Total (5%) as participants in the Lower Zakum concession. ADNOC retains 60% majority shares in both concessions.