Abu Dhabi’s oil ambitions on display at international conference
ABU DHABI - Abu Dhabi hit an oil and gas bonanza with the emirate’s national oil company signing major deals and concessions aimed at bolstering its output and efficiency.
The 21st Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), November 12-15, included more than 10,000 delegates and 2,200 exhibitors from around the world.
Spanish firm Tecnicas Reunidas was awarded one of the biggest deals, a $1.4 billion contract with the Abu Dhabi National Oil Company (ADNOC) to expand its Bu Hasa oil field, 200km south of Abu Dhabi, as part of plans to boost output to 5 million barrels of oil per day by 2030.
The expansion is expected to raise the crude output capacity of Abu Dhabi’s largest onshore field 18% to 650,000 bpd by 2020, the company said. The Spanish firm is to finish the project within 39 months for operator ADNOC Onshore, a subsidiary of the state producer.
The upgrade and expansion of Bu Hasa is a key step towards meeting ADNOC’s 2030 smart growth strategy of increasing crude oil production and reducing costs, Emirati officials noted.
“This significant investment in the Bu Hasa field will enable production capacity to be increased and generate additional value,” said UAE Minister of State and ADNOC Group CEO Sultan Ahmed al-Jaber. “We are on track to meet our production capacity target of 3.5 million barrels of oil per day by the end of this year and, as we look beyond that, to 4 million barrels per day by the end of 2020.”
ADNOC signed a framework agreement with Mubadala Investment Company to explore potential global growth opportunities. Mubadala will build off its portfolio of refining and petrochemicals assets and support ADNOC’s international Downstream investment ambitions.
ADNOC and Mubadala will explore the potential of processing crude oil and other hydrocarbons supplied by ADNOC, as well as utilising technologies owned by Mubadala with product offtake by other ADNOC companies.
The end-to-end investment model will allow the United Arab Emirates to ensure long-term security of its hydrocarbon resources and capture margin along the value chain.
ADNOC signed a preliminary agreement with the Indian Strategic Petroleum Reserves (ISPRL) to explore the possibility of storing its crude at the firm’s underground oil storage facilities in India.
ISPRL, an Indian government-owned company that stores emergency crude supplies, has approximately 17 million barrels of oil capacity divided into four compartments at its Padur facility in south-western India, ADNOC said in a statement. Under the agreement, ADNOC could store crude in two of the compartments at Padur.
“India is an important oil market and this agreement underscores the strategic energy partnership between the UAE and India, which leverages the UAE’s and ADNOC’s expertise and oil resources,” Jaber noted.
“It is our firm hope that we will be able to convert this framework agreement into a new mutually beneficial partnership that will create opportunities for ADNOC to increase deliveries of high-quality crude oil to India’s expanding energy market.”
On the gas side of the industry, ADNOC secured large deals with Saudi ARAMCO to collaborate in the natural gas and liquefied natural gas (LNG) sector.
Jaber said increased cooperation between ADNOC and the Saudi state oil company was expected to yield greater energy security and long-term economic prosperity for both countries.
“This agreement will ensure that we are well-positioned to secure greater returns from global LNG demand growth by combining the technological and operational expertise of two of the world’s leading national oil companies,” he said.
ADNOC awarded Italian Eni a 25% stake in a multibillion-dollar gas concession, the first ultra-sour gas offshore project since the Emirates announced a $132 billion plan to achieve self-sufficiency.
The Ghasha Concession, with a 40-year term, consists of the Hail, Ghasha, Dalma and other offshore fields. Eni will contribute 25% of the development cost of the multibillion-dollar project, ADNOC said in a statement.
“Development of our Hail, Ghasha and Dalma ultra-sour gas offshore resources, at commercial rates, will make a significant contribution towards delivering that strategic imperative and bringing forward the day when the UAE will not only be self-sufficient in gas but also transition to net exporter of gas,” Jaber said.
ADIPEC 2018 included more than 80 ministers, CEOs and global oil and gas business leaders for four days of activities focused on energy challenges and the hydrocarbon landscape.
Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan said the conference helped the UAE strengthen its position as a destination hub for talks on energy, oil and gas.
“The UAE will continue to invest its oil and gas resources in the best interests of the country and that was part of economic diversification efforts to secure a prosperous future for the next generation,” he said.