Pak Consortium Bags Mega Oil Exploration Deal

Advertisement

The Abu Dhabi National Oil Company (ADNOC) announced a historic exploration concession agreement to a consortium of four Pakistani companies…reports Asian Lite News

The 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 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 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 agreement builds on the deep-rooted bilateral relationship between the UAE and Pakistan and underscores ADNOC’s expanded approach to strategic partnerships, including those who 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.

Flag of the United Arab Emirates

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

“The consortium was selected as part of Abu Dhabi’s block bid round where we have once again reinforced our approach to strategic partnerships that contribute 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 our partners in this second competitive block bid round as we continue to accelerate the exploration and development of Abu Dhabi’s untapped resources, in line with the Leadership’s wise directives.”

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.

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 watershed moment for Pakistan and the Emirate of Abu Dhabi towards bilateral energy cooperation and economic links but also offers an opportunity to strengthen strategic cooperation with ADNOC to share technical know-how and expertise.

“We are particularly excited that this consortium comprises the ‘big four’ national exploration and production companies that are fully geared to support ADNOC and the Emirate of Abu Dhabi in reinforcing its leading position in the global energy sector.”

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.

ALSO READ: Abu Dhabi reduces new business set up requirements by 71%

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.

Following ADNOC’s recent discoveries of 22 billion stock tank barrels (STB) of recoverable unconventional oil resources and 160 trillion standard cubic feet (SCF) of recoverable unconventional gas resources, it was decided not to award an exploration license for Onshore Block 2. ADNOC intends to engage with potential partners for unconventional resource licensing opportunities around this geographical area. This area contains some of the unconventional resources discovered that have production potential ranking alongside the most prolific North American shale oil plays.

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. 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.

PPL operates 15 producing fields across Pakistan and contributes over 20% of the country’s total natural gas supplies. As of June 2020, PPL’s proven recoverable reserves were 1,793.5 billion cubic feet (bcf) of natural gas, 13.3 million barrels (mmbbl) of oil/ NGL/ condensate and 543.1 thousand tonnes (Ktons) of LPG.