Oil field production contracts and concession talks between Abu Dhabi and international energy companies will not be affected by the crude prices slump, the UAE’s energy minister told the Gulf Intelligence UAE Energy Forum.
Companies “are bidding on a long-term relationship that’s going to last 30 years or more; they are having a view on that as a long-term investment.
“They’re not going to change their mind every time we have a glut in the market,” HE Suhail Al Mazrouei said.
“Those who are bidding on Adco are all mature oil and gas companies, and they understand what they’re bidding on, they understand the value.
“I don’t think it [the low oil price] is going to impact it directly in any shape or form because this is not just a one or two-year arrangement, but a long-term arrangement,” the UAE energy minister said.
Exploration and production bids from Western and Asian IOCs are currently being assessed by the Abu Dhabi’s Supreme Petroleum Council after onshore concessions of Abu Dhabi Company for Onshore Oil Operations expired in early 2014.
Adco operated a joint venture between state-run Abu Dhabi National Oil Co. ( Adnoc ), holding a 60% stake, and ExxonMobil, Royal Dutch Shell, BP and Total, each with a 9.5% share, and Partex Oil & Gas, with 2%.
Adco ‘s concession covers a collection of onshore fields in Abu Dhabi emirate that together account for around 40% of the country’s 2.8mn barrels a day oil production.
Adnoc is also set to announce plans in the near future for its offshore concessions that expire in 2018.
New concession arrangements at a time of low prices may prove difficult for some other countries entering the industry for the first time, but not the UAE, the minister said.
“From country to country it depends on the fiscal regime, the stability of the fiscal regime, and the nature of the contract – this is all going to be judged by those who are bidding versus the current oil prices.
“If someone is aspiring to put [in place] very tough terms at these prices I don’t think he’s going to be successful,” he added.
