Page 9 - MEOG Annual Review 2021

MEOG MARCH MEOG

that year. find the Emirates’ oil reserve base now stands at
As has become customary for ADNOC, 107bn barrels, from which it currently produces
Oxy was awarded a 100% stake in the explora- 4mn barrels per day (bpd).
tion phase and rights to the development and The SPC said: “This increase in reserves is as
production phases of any successful commer- a result of the ongoing maturation of ADNOC’s
cial discovery, at which point ADNOC has the developments towards its 5mn bpd oil produc-
option to take its customary 60% share. Oxy is tion capacity target by 2030, and its appraisal
expected to spend up to $140mn during explo- activities, particularly in the Al Nouf field.”
ration, including a participation fee.
Block 5 covers a 4,212-square km area south- Fleet expansion
east of Abu Dhabi City and borders Oman. With the output increase in mind, ADNOC has
ADNOC noted that new 3D seismic data has pushed forward with the expansion of its fleet of
been acquired that covers a large part of the drilling rigs. Shelf Drilling last week announced
concession, which suggests that the block has that ADNOC Drilling had completed the pur-
“promising potential”. The term of the produc- chase and delivery of the Shelf Drilling Journey
tion phase is 35 years from the date exploration jack-up under a $77mn-plus deal agreed late last
commences. year.
Awards continue to be apportioned under The ADNOC subsidiary announced a plan
the auspices of the second bid round, with Off- in 2019 to increase its drilling fleet and it has
shore Block 4 having been awarded in early Feb- so far added 66 rigs, taking the current number
ruary to Japan’s Cosmo Energy, while, like Oxy, under ownership to 95. As part of this initiative,
a consortium of Italy’s Eni and Thailand’s PTT the company purchased four domestically fabri-
Exploration and Production (PTTEP) picked up cated rigs for more than $100mn and it has plans
Offshore Block 3 in December. to add many more onshore, offshore and island
In announcing each of the awards, ADNOC rigs by 2025.
noted that the licensees would “leverage and The parent firm, meanwhile, intends to
contribute financially and technically” to the expand conventional drilling by as much as 40%
ongoing mega seismic survey currently being during the same time period while also rapidly
carried out by China National Petroleum Corp. increasing unconventional drilling.
(CNPC) geophysical specialist subsidiary BGP. The fleet expansion strategy also applies to
In November, ADNOC announced that it had the midstream, with ADNOC’s shipping and
agreed a deal with BGP to further expand the maritime logistics arm announcing, also last
massive onshore and offshore seismic survey week, the acquisition of six very large crude car-
from around 53,000 square km to 82,000 square riers (VLCCs), adding a total cargo capacity of
km, increasing the $1.6bn contract value by 12mn barrels. Two of the vessels have already
another $519mn. joined the fleet, while orders have been placed
BGP is represented in the UAE by Al for three newbuild vessels with options, to be
Masaood Oil Industry Supplies & Services Co. delivered next year and in 2023. The final unit
has been purchased and will join the fleet soon.
Output push ADNOC Logistics & Services (ADNOC
Oxy’s discovery follows the announcement L&S) made its entry into the VLCC sector in
in November by the SPC of conventional and October last year when it bought two vessels,
unconventional oil finds estimated at 22bn Hunter Laga and Hunter Saga, from Hunter
stock tank barrels of unconventional oil and 2bn Group for $84mn each. Data from VesselsValue
barrels of conventional resources respectively. shows that the subsidiary owns six bulkers, three
Without providing the location of the unconven- containerships, nine tankers, eight LNG carriers
tional discovery, the SPC said that it was located and one LPG carrier.
in an onshore exploration area that covers 25,000 Making such strides ahead of the launch of
square km. the Ice Futures Abu Dhabi on March 29 is a clear
In a statement, the council said that the pro- indication of ADNOC’s intention to increase its
duction potential of the discovery “ranks along- capability to exert a far greater influence over the
side the most prolific North American shale oil oil and gas industry amid persistent rumours
plays”. It added that following the conventional that the UAE is considering leaving OPEC.™

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