Page 12 - MEOG Week 33 2021

MEOG PROJECTS & COMPANIES MEOG
Pakistan approves investment in Abu Dhabi block
UAE
THE government of Pakistan this week gave the go-ahead for a consortium of local oil and gas companies to invest $400mn in an exploration block included in Abu Dhabi’s second compet- itive bid round.
The Economic Coordination Committee approved a summary of the “Petroleum Division regarding no objection certificate for issuance of the parent company guarantees/corporate guar- antees by each of the consortium companies, on a joint and several basis”.
Last month, Pakistan Petroleum Ltd (PPL), Oil and Gas Development Company Ltd (OGDL) and Mari Petroleum Company Ltd approved the guarantees in favour of ADNOC and the Supreme Council for the Financial and Economic Affairs (SCFEA), which will assume the regulatory powers of the Supreme Petroleum Council (SPC).
The three companies have also formed a special purpose vehicle (SPV) alongside Gov- ernment Holding Pvt Ltd (GHPL) with each holding an equal 25% share in Pakistan Interna- tional Oil Ltd which has been registered on the Abu Dhabi Global Market (ADGM).
Each of the shareholders will provide up to $100mn over a period of five years to explore the block.
In a stock exchange filing, Mari Petroleum said: “In case the block is not awarded to the con- sortium, the NewCo shall be dissolved.”
The blocks included in the second round cover large areas throughout Abu Dhabi, cover- ing a total acreage of 34,000 square km. Onshore Block 2 is in the south-west, bordering Saudi Arabia, while Onshore Block 5 borders Oman in the south-east. Offshore Blocks 3, 4 and 5 cover the majority of Abu Dhabi’s offshore area.
According to ADNOC: “Some of the blocks already have discoveries, and within the
combined area there are 290 targeted reservoirs from 92 prospects and leads. In addition to the country’s conventional potential, one of the offered blocks is expected to contain significant unconventional resources.”
With Onshore Block 5 and Offshore Blocks 3 and 4 already apportioned, the Pakistani consor- tium’s interest is presumably in either Onshore Block 2 or Offshore Block 5, which covers an area north of the 50bn-barrel Upper Zakum oilfield.
In February, ADNOC awarded Offshore Block 4 to the local subsidiary of Japan’s Cosmo Energy, which is the majority owner of Abu Dhabi Oil Co. (ADCO) and is predominantly known as a refining specialist. Cosmo took a 100% stake in the exploration phase and will hold rights to the development and production phases of any successful commercial discovery at which point ADNOC has the option to take its customary 60% share.
The contract was signed for a term of 35 years with Cosmo agreeing to spend up to $145mn on exploration and appraisal drilling, including a participation fee, across the 4,865-square-km offshore concession.
The deal follows similar agreements in December with US-based Occidental Petroleum for onshore Block 5 and with a consortium of Italy’s ENI and Thailand’s PTT Exploration and Production (PTTEP) for Offshore Block 3.
As with those agreements, ADNOC noted that Cosmo would “leverage and contribute financially and technically” to the ongoing mega seismic survey currently being carried out by China National Petroleum Corp. (CNPC) geo- physical specialist subsidiary BGP. The scope of the 3D onshore and offshore survey was recently expanded from around 53,000 square km to 82,000 square km, taking the total value of the contract to $2.12bn.™
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