Project Profile
Value: US$30-40 billion
Reserves: unknown
Area: unknown
Production: currently producing 1.6 million barrels a day (target is 1.8 million bpd by 2017)
Start-up Year: 2017
Total has signed a new 40-year onshore concession agreement with the Supreme Petroleum Council of the Emirate of Abu Dhabi (United Arab Emirates) and the Abu Dhabi National Oil Company (ADNOC), granting Total a 10% participating interest effective January 1, 2015. The concession covers the fifteen principal onshore oil fields of Abu Dhabi and represents more than half of the Emirate’s production. The new concession will be operated by the Abu Dhabi Company for onshore Petroleum Operations Limited (ADCO), a new operating company in which Total will be a 10% shareholder. Total has also been appointed Asset Leader for the Bu Hasa and Southeast (Sahil, Asab, Shah, Qusahwira and Mender fields) fields, which represent about two-thirds of ADCO’s production.
In April 2015, Inpex acquired a 5 per cent stake in the concession paying an upfront fee of US$1.1 billion for its share. It joined Total in the 40-year Adco concession, after the company paid a fee of about US$2.2bn. Inpex was one of a number of companies still in contention for a stake of either 10 or 5 per cent after Abu Dhabi National Oil Company asked them to match Total’s terms, which whittled down the field in recent weeks. Inpex, via its subsidiary Japan Oil Development Company, already owns a 12 per cent stake in the UAE’s major offshore field block, Adma, a concession that runs through 2041 after it was extended by 15 years at the beginning of last year. Finally, ADNOC awarded a brand new 40-year stake in its onshore oil concession in Abu Dhabi to South Korea’s GS Energy. The Abu Dhabi for onshore and Petroleum Operations or ADCO, awarded the 3 per cent stake to GS’ upstream wholly-owned subsidiary GS E&P Pte. Ltd. The South Korean firm expects to gain access to around 800 million barrels through the deal, the amount for which was not disclosed. Commercial production from its share of the concession is expected to begin in 2017. The South Korean firm expects to gain access to around 800 million barrels through the deal, the amount for which was not disclosed.
With this deal, the remaining share of the onshore concession yet to be awarded to international bidders now stands at 22 per cent. Adnoc wants operating companies to achieve a 70 per cent recovery rate, which though well above industry average recovery rates of 40 per cent, is a rate that some of the more advanced international oil companies have been able to attain in giant fields elsewhere. ADCO will continue to operate the integrated asset groups of Bab, Bu Hasa, South East (Sahil, Asab, Shah, Qusahwira, Mender) and Northeast Bab (Al Dabb’iya, Rumaitha, Shanayel) in the UAE’s main oil-producing emirate. Currently producing 1.6 million barrels a day from its onshore fields, ADCO plans to bump this up to 1.8 million bpd by 2017 out of a total national production target of 3.5 million bpd. Commercial production from its share of the concession is expected to begin in 2017.
Operators:
Abu Dhabi Company for onshore Petroleum Operations Limited (ADCO): Operator with 100% interest
Abu Dhabi National Oil Company (ADNOC): 60% interest in ADCO
Total: 10% interest in ADCO
BP: 10% interest
Inpex: 5% interest in ADCO
GS Energy (through wholly-owned subsidiary GS E&P Pte. Ltd.): 3% interest in ADCO
CNPC: 8% interest in ADCO
North Petroleum International (a subsidiary of ZhenHua Oil): 4% interest in ADCO