In yet another major announcement, the Abu Dhabi National Oil Company (ADNOC) has revealed today it is in ‘advanced discussions’ with more than a dozen potential partners who have expressed a ‘significant interest’ in the offshore concession, currently operated by its subsidiary the Abu Dhabi Marine Operating Company (ADMA-OPCO) that expires next March.
The potential partners are a mix of existing concession holders in ADNOC’s offshore fields as well as new participants, the Emirati oil giant has said in a press statement.
The manner in which ADNOC says it will manage the ADMA-OPCO concession is significant too – the existing asset will be split into two, or more, concessions with new terms to unlock greater value and increase partnership opportunities.
The concession will be comprise a mix of the Lower Zakum field, Umm Shaif, Nasr, Umm Lulu and Satah Al Razboot (SARB) oilfields. ADNOC, on behalf of the Abu Dhabi government, will retain a 60% shareholding in the new concession areas.
“We have received great interest in the concessions from both existing and potential new partners. Discussions are progressing well and companies have been drawn by our stable investment environment and ADNOC’s reliability as a partner, as well as the attractive and sustainable returns that will be generated,” Dr Sultan Ahmed Al Jaber, UAE Minister of State and group CEO of ADNOC has said of the announcement.
“As part of ADNOC’s new partnership approach, we look forward to working with partners who will bring new and innovative thinking to the table. Partners who can demonstrate tangible value-add to our operations through technology, expertise, long term capital and market access, as well as a shared commitment to drive operational performance and efficiency to deliver smart growth and strong financial returns. Our ideal partners should also be willing to invest across different parts of our value chain” Al Jaber was quoted as saying in the press release received by arabianoilandgas.com.
Following ADNOC’s 2016 announcement to consolidate the offshore operations of ADMA-OPCO and the Zakum Development Company (ZADCO), the new ADMA concessions and the existing Upper Zakum concession, operated by ZADCO, will be operated by the new integrated offshore company, capitalising on operational synergies and enhanced performance.
The consolidation of the two companies is due to be completed before the end of the year.
Existing shareholders in ADMA-OPCO are BP (14.67%), Total (13.33%) and JODCO (12%). The international shareholders in ZADCO are ExxonMobil (28%) and JODCO (12%). The Abu Dhabi Government, through ADNOC, has a 60% interest in both operating companies.
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The announcement less than a month after ADNOC unveiled the expansion of its strategic partnership model, as well as the active management of its portfolio of assets.
ADNOC’s new approach, which builds on its flexible and enhanced operating model as well as its 2030 growth strategy, will enable the company to unlock and maximiae value from across the Group. The new approach will deliver improved revenue streams and ensure smart growth, while also enhancing performance and securing greater access for ADNOC’s products in key growth markets.
As ADNOC looks to boost oil production capacity to 3.5mn barrels per day (bpd) in 2018, offshore development is a strategic focus of the company. The existing concession area operated by ADMA-OPCO, which produces around 700,000 bpd of oil, is planned to have a production capacity of about 1mn bpd by 2021.
ADNOC has adopted a progressive approach to delivering its future growth through its 2030 strategy, which aims to ensure a more profitable upstream business, a more valuable downstream business, and an economic and sustainable supply of gas.
In upstream, ADNOC is adapting to the evolving market environment by maximizing operational efficiencies, reducing costs and increasing crude oil production capacity to 3.5m bpd in 2018.
In its gas business, ADNOC will develop a variety of natural gas sources, including tapping into gas caps and undeveloped deep and sour gas reserves.
