Abu Dhabi National Oil Company (ADNOC) announced the signing of a historic exploration concession agreement, awarding the exploration rights for Abu Dhabi’s Offshore Block 5.
The agreement was done with 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 block bid round. The consortium is led by PPL.
The award marks the first time Pakistani companies invest in and explore for oil and gas in an Abu Dhabi concession as well as the first time ADNOC partners with Pakistani energy companies.
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.
Under the terms of the agreement, the consortium will hold a 100% stake in the exploration phase, investing up to $304.7 million (AED1.12 billion) towards exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an offshore area of 6,223 square kilometers and is located 100 kilometers north east of Abu Dhabi city.
Following a successful commercial discovery during the exploration phase, the consortium will have the right to a production concession to develop and produce such commercial discoveries.
ADNOC has the option to hold a 60% stake in the production phase of the concession. The term of the production phase is 35 years from the commencement of the exploration phase and the block offers the potential to create significant in-country value for the UAE over the lifetime of the concession.
In addition to drilling exploration and appraisal wells, the exploration phase will see the consortium leverage and contribute financially and technically to ADNOC’s mega seismic survey, which is acquiring 3D seismic data within the block area. The data already acquired over a large part of the block combined with its proximity to existing oil and gas fields, suggests the concession area has promising potential.
ADNOC launched Abu Dhabi’s second competitive block bid round in 2019, offering a set of major onshore and offshore blocks, on behalf of the Government of Abu Dhabi. The award of Offshore Block 5 to the Pakistani consortium concludes this second block bid round, which has seen very competitive proposals submitted for the geographical areas offered.
As part of Abu Dhabi’s second block bid round, ADNOC 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.
