ADNOC signs new offshore concession agreement with Austria’s OMV

ADNOC signs new offshore concession agreement with Austria’s OMV
Dr Sultan Ahmed Al Jaber, ADNOC Group CEO (front right), and Dr Rainer Seele, CEO of OMV, sign the deal as Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi (back right), and Sebastian Kurz, Chancellor of Austria, look on.
Published: 30 April 2018 - 1:33 a.m.
By: Jonathan Sheikh-Miller

The Abu Dhabi National Oil Company (ADNOC) has signed an agreement awarding Austrian integrated oil and gas company OMV a 20% stake in Abu Dhabi’s SARB and Umm Lulu offshore concession. OMV is part-owned by a subsidiary of Abu Dhabi’s Mubadala Investment Company.

The signing was witnessed by Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Sebastian Kurz, Chancellor of Austria.

OMV, Austria’s largest listed industrial company, joins Spanish integrated oil and gas company CEPSA (20%), which is wholly owned by the Mubadala Investment Company, as a shareholder in the offshore concession.

OMV contributed a participation fee of $1.5bn to enter the concession, which also takes account of previous investments made by ADNOC in the SARB field. ADNOC retains a majority 60% stake in the offshore concession that will be operated by ADNOC Offshore, a subsidiary of ADNOC, on behalf of the concession partners.

The concession area comprises two producing fields, Umm Lulu, part of the former ADMA–OPCO offshore concession, and SARB. The ADMA-OPCO concession has been divided into three separate concessions in order to maximise commercial value, broaden ADNOC’s partner base, expand technical expertise and enable greater market access.

The agreement, which has a term of 40 years, was signed by Dr Sultan Ahmed Al Jaber, ADNOC Group CEO, and Dr Rainer Seele, CEO of OMV.

Dr Al Jaber said: “This long-term strategic agreement with OMV, as well as the other seven offshore concession agreements we have concluded recently, underscores ADNOC’s commitment to maximising value from Abu Dhabi’s substantial resources for the benefit of the nation, in line with the leadership’s directives.

“The expansion of the global economy and increasing demand for oil, refined products and petrochemicals, provide us with new opportunities to create value across our upstream and downstream business. To seize these opportunities, we will work closely with OMV, and our other partners to further optimise operational efficiencies, enhance performance, and capture future growth opportunities. OMV’s strong track record in deploying advanced technologies to cost-effectively increase recovery rates from mature fields will help enable ADNOC to continue to be a reliable supplier of oil for decades to come.”

Today’s agreement completes the round of offshore concession awards, which has seen ADNOC bring on board more partners who bring value to the table, in terms of market access, capital, technology and expertise. Collectively the offshore agreements, concluded since the start of the year, have contributed $7.9bn in participation fees and secured markets for 40% of the UAE’s oil for the next 40 years.

OMV is already working with ADNOC on a number of other projects across the company’s value chain, including appraisal of the Shuweihat sour gas field. In May 2017, ADNOC and OMV also agreed to work together to explore potential opportunities in support of ADNOC’s downstream businesses and the company’s 2030 smart growth strategy.

Dr Seele said: “OMV is establishing a material position as an oil producer in the UAE and is delighted to further build on its existing partnership with ADNOC and Abu Dhabi. The offshore concession award is an important milestone in OMV’s delivery on its 2025 strategy, as we expand our footprint in one of the world’s leading oil and gas hubs. We are confident that our technological expertise will contribute to value creation and profitable growth, for all partners involved.”

Click here to add your comment

Please add your comment below
Your email address will not be published