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MEOG COMMENTARY MEOG

Delays coming to an end for

ADNOC as CNOOC joins the party

China’s CNOOC has joined Abu Dhabi’s Lower Zakum consortium just as signs
were emerging that ADNOC would resume offshore contracting activity

UAE ABU Dhabi National Oil Co. (ADNOC) post- Chinese involvement
poned bidding contests for work on oil and gas This week, ADNOC agreed to the transfer of
projects earlier this year as COVID-19 took its rights in the Lower Zakum and Umm Shaif and
WHAT: toll. However, the company is now nearing set- Nasr offshore concessions from CNOOC Ltd,
ADNOC is set to resume ting dates for submissions as it hopes to resume the overseas arm of China National Offshore Oil
bidding for work at major contracting before the end of the year. Corp. (CNOOC), to fellow Chinese company
oil and gas developments Projects affected by the delays include the China National Petroleum Corp. (CNPC).
as it seeks to bounce $1.5Bn Umm Shaif gas cap and packages for The transfer will see CNOOC acquire a 40%
back from the lockdown. development of the offshore Hail & Ghasha sour interest in CNPC’s majority-owned subsidiary
gas fields. PetroChina Investment Overseas (Middle East)
WHY: Ltd.
International contractors Umm Shaif PetroChina holds a 10% interest in the Lower
are vital to the UAE’s For Umm Shaif, ADNOC is awaiting commer- Zakum concession and a 10% interest in the
development of its on- cial bids for front-end engineering and design Umm Shaif and Nasr concession. As a result
and offshore fields. (FEED) work, while bidding for engineering, of the transfer, CNOOC will hold a 4% inter-
procurement and construction (EPC) work was est in the Lower Zakum concession and a 4%
WHAT NEXT: also pushed back during Q2. Consortia of Abu interest in the Umm Shaif and Nasr concession,
The growing role of Dhabi-based National Petroleum Construction while PetroChina will retain a 6% stake in the
Chinese companies in the Co. (NPCC) with UK-headquartered Technip- concessions.
Emirati oil and gas sector FMC and Saipem with Petrofac are understood The deal follows the mid-2019 signing of a
has been emphasised to be involved in the bidding for Umm Shaif, comprehensive framework agreement between
by CNOOC’s entry to the alongside McDermott of the US. ADNOC and CNOOC to explore new oppor-
Lower Zakum, Umm Shaif The project is the first to be executed under tunities to collaborate in up- and downstream as
and Nasr concessions. ADNOC’s “integrated gas strategy,” which was well as in LNG.
launched in November 2018. The initiative In the Lower Zakum concession, CNOOC
encompasses plans to exploit the gas caps at joins a consortium led by ONGC Videsh (10%),
several of the emirate’s maturing offshore and INPEX Corp. (10%), CNPC (6%), Eni (5%), and
onshore oilfields. Umm Shaif is one of the com- Total (5%), with ADNOC holding its customary
pany’s oldest and largest, having been on stream 60% stake. ADNOC and CNOOC are joined
since 1962 and producing around 275,000 bpd in the Umm Shaif and Nasr concessions by Eni
of crude. When France’s Total, Italy’s Eni and (10%), Total (20%), and CNPC (6%).
PetroChina acquired the combined 40% share- Chinese state firms have also been increas-
holding allocated to foreign partners in the ingly involved in Abu Dhabi’s upstream sector
newly created concession for Umm Shaif and since CNPC was awarded a stake in the conces-
the nearby Nasr fields, a target was adopted of sion for emirate’s main onshore oilfields in early
raising gas output at the former by around 5.2 2017.
bcm per year.
TechnipFMC subsidiary Genesis Oil & Gas Hail & Ghasha
carried out a conceptual study on the scheme, Meanwhile, there are thought to be four EPC
and the project is provisionally anticipated to packages on offer for Hail & Ghasha, worth as
include new wellhead, gas-processing, separa- much as $10Bn, following the submission of
tion and riser platforms, along with pipelines technical bids in Q4 2019.
and cabling. Onshore work will also be required OMV had been working with ADNOC
to modify the existing gas-processing facilities at and the US’ Occidental Petroleum (Oxy) at the
Das Island. Completion of the fast-track scheme Dalma, Ghasha and Hail fields since 2016 under
is envisaged in 2022. a four-year contract encompassing seismic sur-
Middle East Oil & Gas (MEOG) under- veys, drilling and engineering, and had been tak-
stands that bidding on Umm Shaif will resume ing the lead on some of the early contracting on
imminently. the development of the three assets.

P4 www. NEWSBASE .com Week 30 29•July•2020