Occurred Abu Dhabi National Oil Company ADNOC and Petronas, the Malaysian national oil and gas company, have signed a concession agreement for the “No. 1” onshore area in Abu Dhabi.
Under the terms of the agreement, which extends for 6 years, Petronas will retain a 100% stake in the concession management rights to explore and evaluate unconventional resources in “Onshore Block No. 1”, covering an area of more than 2,000 square kilometers in the Al Dhafra region of the Emirate of Abu Dhabi.
Sultan Al Jaber, Minister of Industry and Advanced Technology, Chief Executive Officer and CEO of ADNOC, said, “Cooperation with Petronas through this historic agreement for an unconventional oil concession, which represents a new phase of strategic cooperation in the energy sector between the UAE and the Kingdom of Malaysia, also confirms the country’s position as a preferred and trusted investment destination,” according to Emirates News Agency, WAM.
He added: “ADNOC continues to make optimal and responsible use of Abu Dhabi’s rich hydrocarbon resources to contribute to the growth and development of the local economy and support global energy security, and we look forward to partnering with Petronas to make full use of the unconventional petroleum resources that can be extracted in Onshore Zone #1.”
For his part, Petronas Group Chief Executive Tengku Muhammad Tawfiq said, “The award of this concession is an important development for Petronas and we are delighted with our fruitful partnership with ADNOC, which builds on the close and extensive relationships between the UAE and Malaysia”.
After a positive evaluation phase, the partners can conclude a production concession agreement which will be valid for a period of 30 years, starting from the date of award of the first concession to Petronas, and ADNOC will have the possibility to keep a 50 % in the production concession The concession area offers greater opportunities for the creation and enhancement of value in the United Arab Emirates throughout the duration of the concession.
According to the agreement, Petronas will contribute financially to the huge 3D geophysical survey project being implemented by ADNOC, which has already provided accurate data on the concession area, as well as benefiting from the data and information provided by the project on the area of concession.
Abu Dhabi’s recoverable unconventional oil resources are estimated to be approximately 22 billion barrels of light sweet crude, relative to ADNOC’s standard oil grade “Murban” for low-carbon oil production, while these resources are have manufacturing capabilities comparable to North America’s largest non-traditional resources in terms of output.