Adnoc awards Russia's Lukoil 5% stake in Ghasha sour gas concession

Published: 16 October 2019 - 9:35 a.m.

Abu Dhabi’s government-owned, Abu Dhabi National Oil Company (Adnoc) had awarded a 5% stake to Lukoil, a subsidiary of Mosco Exchange-listed Lukoil Oil Company in its Ghasha ultra-sour gas concession, which includes Italy’s Eni, Germany’s Wintershall Dea, and Austria’s OMV as fellow stakeholders, with the agreement between the companies being signed on the sidelines of Russian President Vladimir Putin’s visit to the country.

According to the UAE’s state-owned news agency, Wam, Adnoc, Lukoil, and Russian Direct Investment Fund (RDIF) signed a framework agreement to explore potential future cooperation for the Ghasha concession.

Under the terms of the stake award, Lukoil will invest $190m (AED697.3m) as a signing fee for the concession which is home to gas fields including Hail, Ghasha, and Dalma. The concession award marks the first time a Russian firm being made a part of an Adnoc concession, in which the Abu Dhabi’s state-owned company take the majority stake.

Adnoc’s Ghasha megaproject is expected to produce more than 120,000 barrels per day of oil, as well as high-value condensates, and over 425 million standard cubic metres per day of natural gas by 2025. The natural gas will be enough to fulfil electricity needs of more than two million homes.

Wam reported that the stake award agreement was signed between UAE Minister of State, and group chief executive officer of Adnoc, Dr Sultan bin Ahmed Al Jaber, and president of Lukoil — which accounts for more than 2% of the world's oil production, and around 1% of the world’s proved hydrocarbon reserves, — Vagit Alekperov.

Meanwhile, the framework agreement were inked by Al Jaber, Alekperov, and CEO of RDIF, Kirill Dmitriev.

Speaking about the agreements, Al Jaber said: "The concession award, as well as the framework agreement, reflect the strong and strategic bilateral ties between the UAE and Russia and highlight the important role of energy cooperation in strengthening the relations between our two countries."

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