UAE: 4 Pakistani Firms Awarded Oil and Gas Exploration Block in Abu Dhabi – News

UAE: 4 Pakistani Firms Awarded Oil and Gas Exploration Block in Abu Dhabi – News

The first time Pakistani companies are investing in and searching for oil and gas in a concession in Abu Dhabi.

The Abu Dhabi National Oil Company (ADNOC) announced on Tuesday the signing of a landmark exploration concession agreement, granting the exploration rights for Abu Dhabi’s Offshore Block 5 to a consortium of four Pakistani companies – Pakistan Petroleum Limited (PPL), Mari Petroleum Company Limited (MPCL), Oil and Gas Development Company Limited (OGDCL) and Government Holdings (Private) Limited (GHPL) – in Abu Dhabi’s second competitive bidding round. The consortium is led by PPL.

The award marks the first time Pakistani companies are investing in and seeking oil and gas in a concession in Abu Dhabi and the first time ADNOC has partnered with Pakistani energy companies.

The agreement builds on the deep-rooted bilateral relationship between the UAE and Pakistan and underscores ADNOC’s comprehensive approach to strategic partnerships, including those that can provide access to key growth markets for the company’s crude oil and products.

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.

On this occasion, Dr. Al Jaber said: “This historic exploration concession award marks a new chapter of energy cooperation in the 50-year relationship between the UAE and Pakistan. It represents an important platform on which we can create win-win opportunities for Pakistan’s energy security and support the strategic and further strengthen economic ties between our two countries. We are delighted to partner with Pakistan Petroleum Limited and the other consortium members on Offshore Block 5.

“The consortium has been selected as part of the Abu Dhabi bidding round, where we have re-strengthened our approach to strategic partnerships that contribute to 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 of our partners in this second competitive bidding round as we continue to accelerate exploration and development of Abu Dhabi’s untapped resources, in line with leadership’s wise guidelines.”

Under the terms of the agreement, the consortium will have a 100 percent stake in the exploration phase and invest up to $304.7 million (Dh 1.12 billion) in exploration and appraisal wells, including a participation fee, for the search and assessing oil and gas opportunities in the block that covers an offshore area of ​​6,223 square kilometers and is 100 kilometers northeast of Abu Dhabi city.

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 turning point for Pakistan and the Emirate of Abu Dhabi towards bilateral energy cooperation and economic ties, but also provides an opportunity to strengthen strategic partnership with ADNOC to share technical know-how and expertise.

“We are extremely pleased that this consortium includes the ‘big four’ national exploration and production companies fully focused on supporting ADNOC and the Emirate of Abu Dhabi in strengthening their leadership position in the global energy sector.”

Following a successful commercial discovery during the exploration phase, the consortium is entitled to a manufacturing 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 duration of the production phase is 35 years from the start of the exploration phase and the block has the potential to create significant domestic value for the UAE over the duration of the concession.

In addition to drilling exploration and assessment wells, in the exploration phase the consortium will benefit from and contribute financially and technically to ADNOC’s mega seismic survey, which acquires 3D seismic data within the block area. The data already obtained on much of the block, coupled with the proximity of existing oil and gas fields, suggest that the concession area has promising potential.

ADNOC launched Abu Dhabi’s second competitive bidding round in 2019, offering a series of major onshore and offshore blocks on behalf of the Abu Dhabi government. With the award of Offshore Block 5 to the Pakistani consortium, this second round of bidding for the block has concluded, with highly competitive proposals being submitted for the geographic areas offered.

Following ADNOC’s recent discoveries of 22 billion storage tank barrels (STB) recoverable unconventional oil resources and 160 trillion standard cubic feet (SCF) recoverable unconventional gas resources, it was decided not to grant an exploration license for Onshore Block 2. ADNOC intends to enter into discussions with potential partners for unconventional resource licensing capabilities in this geographic area. This area contains some of the unconventional resources discovered that have production potential alongside the most productive North American shale oil plays.

As part of Abu Dhabi’s second bidding round, ADNOC has awarded Offshore Block 4 to a wholly owned subsidiary of Cosmo Energy Holdings Co., Ltd.; Offshore Block 3 to a consortium led by wholly owned subsidiaries of Eni and PTT Exploration and Production Public Company Limited (PTTEP); and Onshore Block 5 to Occidental. Based on existing data from detailed petroleum system studies, seismic surveys, exploration and valuation sources, estimates suggest that the blocks in this second round of bidding will contain several billion barrels of oil and several trillion cubic feet of natural gas.

PPL operates 15 producing fields across Pakistan and contributes to more than 20 percent of the country’s total natural gas supply.

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