The Abu Dhabi National Oil Company (ADNOC) announced on Tuesday the signing of a historic exploration concession agreement, awarding the exploration rights for Abu Dhabi’s Offshore Block 5 to a consortium of four Pakistani companies, reported Emirates Newa Agency (WAM).
The consortium is led by Pakistan Petroleum Limited (PPL), with Mari Petroleum Company Limited (MPCL), Oil and Gas Development Company Limited (OGDCL), and Government Holdings (Private) Limited (GHPL), the other partners in Abu Dhabi’s second competitive block bid round.
This is the first time ADNOC has partnered with Pakistani energy companies, and the award marks the first time Pakistani companies have invested in and explored for oil and gas in an Abu Dhabi concession. as well as the first time ADNOC partners with Pakistani energy companies.
Under the terms of the agreement, the consortium will hold a 100 percent stake in the exploration phase, investing up to $304.7 million (AED1.12 billion) towards exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an offshore area of 6,223 sq. kilometers and is located 100 km north east of Abu Dhabi city.
The exploration concession agreement was signed by Dr. Sultan bin Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of ADNOC, and Moin Raza Khan, Managing Director and CEO of PPL.
Speaking on the occasion, Dr. Al Jaber said, “This historic exploration concession award marks a new chapter of energy cooperation in the 50-year old UAE-Pakistan relationship. It represents an important platform upon which we can drive win-win opportunities to support Pakistan’s energy security and further strengthen the strategic and economic ties between our two countries. We are delighted to partner with Pakistan Petroleum Limited and the other members of the consortium on Offshore Block 5.
"The consortium was selected as part of Abu Dhabi’s block bid round where we have once again reinforced our approach to strategic partnerships that contribute the right combination of market access, capital, best-in-class expertise, or advanced technology. We are very optimistic about the potential to unlock significant value with all our partners in this second competitive block bid round as we continue to accelerate the exploration and development of Abu Dhabi’s untapped resources..."
Khan said, "The PPL-led consortium is delighted to be selected for the concession award of Abu Dhabi’s Offshore Block-5. This award is not only a watershed moment for Pakistan and the Emirate of Abu Dhabi towards bilateral energy cooperation and economic links but also offers an opportunity to strengthen strategic cooperation with ADNOC to share technical know-how and expertise.
"We are particularly excited that this consortium comprises the ‘big four’ national exploration and production companies that are fully geared to support ADNOC and the Emirate of Abu Dhabi in reinforcing its leading position in the global energy sector."
Following a successful commercial discovery during the exploration phase, the consortium will have the right to a production concession to develop and produce such commercial discoveries. ADNOC has the option to hold a 60 percent stake in the production phase of the concession.
The term of the production phase is 35 years from the commencement of the exploration phase and the block offers the potential to create significant in-country value for the UAE over the lifetime of the concession.
In addition to drilling exploration and appraisal wells, the exploration phase will see the consortium leverage and contribute financially and technically to ADNOC’s mega seismic survey, which is acquiring 3D seismic data within the block area. The data already acquired over a large part of the block combined with its proximity to existing oil and gas fields, suggests the concession area has promising potential.