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09 Dec 2020 | 08:44 UTC — Dubai
By Dania Saadi
Highlights
This is Occidental's second concession win in two years
Oxy is first to win in ADNOC's second bidding round
Four remaining blocks up for grabs in second round
Dubai — Abu Dhabi National Oil Co., the UAE's biggest energy producer, has awarded Occidental an oil and gas exploration concession in its second competitive bidding round, as the national oil producer seeks to ramp up exploration on the path to reach 5 million b/d production capacity by 2030.
Occidental will own a 100% stake in the exploration phase, investing up to Dirhams 514 million ($140 million), including a participation fee to explore for and appraise oil and gas opportunities in the block spanning an onshore area of 4,212 sq km, ADNOC said in a statement Dec. 9. This is the second exploration block that Occidental has won in the UAE and the first award in ADNOC's second competitive bidding round.
"New 3D seismic data has been acquired over a large part of the block, which combined with its proximity to the existing onshore oil and gas fields, suggests the concession area has promising potential," ADNOC said.
"Following a successful commercial discovery during the exploration phase, Occidental will have the right to a production concession to develop and produce such commercial discoveries."
ADNOC will have the option to own 60% of the production phase of the 35-year concession, which starts with the exploration phase.
ADNOC is ramping up its exploration for oil and gas as it seeks to boost its gas output and increase its oil production capacity by 25% to 5 million b/d by 2030.
Abu Dhabi, the oil-rich emirate in the seven-member UAE federation, is forging ahead with expanding its hydrocarbons sector in the face of the coronavirus pandemic, by also announcing a plan for ADNOC to spend Dirhams 448 billion ($122 billion) over the next five years.
In February 2019, Occidental won Onshore Block 3 in Abu Dhabi's first competitive bid round and the US oil and gas major continues to explore for oil and gas in the concession, which covers an area of 5,782 sq km.
The new award follows the announcement from Abu Dhabi's Supreme Petroleum Council, its highest energy decision making body, about the discovery of recoverable unconventional oil resources estimated at 22 billion stock tank barrels and an increase in conventional oil reserves of 2 billion stock tank barrels, boosting the UAE's conventional reserves to 107 billion STB.
In the second round, Abu Dhabi's five blocks that were opened for bidding -- three of which are offshore and two onshore -- are known as Offshore Block 3, Offshore Block 4, Offshore Block 5, Onshore Block 5 and Onshore Block 2, with the latter offering two separate licensing opportunities for conventional and unconventional oil and gas, respectively.
In total, the five blocks comprise an area of approximately 34,000 sq km.
ADNOC's first bid round concluded in March 2019 with awards to a consortium led by ENI and PTT Exploration and Production Public Co. for Offshore Block 1 and Offshore Block 2. Onshore Block 1 was awarded to Bharat Petroleum Corp. and Indian Oil Corp.; Onshore Block 3 was awarded in a concession to Occidental Petroleum; and Onshore Block 4 was awarded to INPEX Corp.
"Based on existing data from detailed petroleum system studies, seismic surveys, exploration and appraisal wells data, estimates suggest the blocks in this second bid round hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas," ADNOC said in the Dec. 9 statement.