ABU DHABI 19 March 2018: The Abu Dhabi National Oil Company (Adnoc) signed agreements with Total of France, awarding them stakes in two of Abu Dhabi’s new offshore concessions.
Under the terms of the agreements, Total has been awarded a 20% interest in the Umm Shaif and Nasr concession and a 5% interest in the Lower Zakum concession. The signing took place at the Abu Dhabi Louvre, a cultural landmark and powerful symbol of the bi-lateral relationship between the United Arab Emirates and France.
Total is Adnoc’s largest and one of its longest international partners, active in Abu Dhabi’s oil and gas sector since 1939. Today, the French super-major collaborates with Adnoc across the value chain, from offshore and onshore exploration, development and production, to processing, products and shipping.
Total contributed a participation fee of Dh4.2 billion (US$1.15 billion) to enter the Umm Shaif and Nasr concession and a fee of Dh1.1 billion ($300 million) to enter the Lower Zakum concession. Both concessions are operated by Adnoc Offshore, a subsidiary of Adnoc, on behalf of all concession partners.
The agreements, which have a term of 40 years and an effective date of March 9, 2018, were signed by Dr Sultan Ahmed Al Jaber, Adnoc Group Chief Executive Officer, and Patrick Pouyanné, Chairman and CEO of Total.
Total is the fourth largest global oil and gas company. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and international crude oil and product trading. Total is also a large scale chemicals manufacturer. In 2017 it produced 2.5 million barrels of oil per day.
The Umm Shaif and Nasr concession and the Lower Zakum concession have been created from the former ADMA offshore concession, which Total has been a partner in since 1953. It has been divided into three separate concession areas with the aim of maximising commercial value, broadening the partner base, expanding technical expertise, and enabling greater market access.
In the Umm Shaif and Nasr concession, Total joins Italy’s Eni, which was recently awarded a 10% stake. 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. Based on Adnoc’s development and initial piloting activities in the gas cap, the concession partners will further pursue the technical and economic evaluation of the development. The gas cap overlays an oil rim which, in combination with Nasr, 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 condensates, from the gas cap, will be refined to extract higher value products that can be used in a variety of petrochemical applications.
In the Lower Zakum concession, Total joins an Indian consortium, led by ONGC Videsh, Japan’s Inpex, as well as Eni as stakeholders. ADNOC is finalizing opportunities, with potential partners, for the remaining 10% of the available 40% stake in the Lower Zakum concession, and for the remaining 10% stake in the Umm Shaif and Nasr concession. Adnoc retains a 60% majority share in both concessions.