Page 6 - AsianOil Week 35 2021

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ADNOC awards concession

to PPL-led consortium

PROJECTS & ABU Dhabi National Oil Co. (ADNOC) this
COMPANIES week awarded the Offshore Block 5 concession
to a consortium of Pakistani companies led by
Pakistan Petroleum Ltd (PPL). The block was
the lone remaining concession from the sec-
ond competitive bid round that was launched
in 2019.
The consortium is comprised of PPL, Oil
and Gas Development Company Ltd (OGDL),
Mari Petroleum Company Ltd and Govern-
ment Holding Pvt Ltd (GHPL). Under the terms
of the deal, the group will own a 100% stake in
the exploration phase of Offshore Block 5, with
a total investment of up to $305mn envisioned
for exploration and appraisal drilling and a par-
ticipation fee. ADNOC also said that it had withdrawn
The deal was signed by UAE Minister Onshore Block 2 from the auction following the
of Industry and Advanced Technology and November 2020 discovery of 22bn stock tank
ADNOC managing director and CEO HE Dr. barrels (STB) of recoverable unconventional
Sultan Ahmed Al Jaber and PPL CEO and man- oil resources and 160 trillion cubic feet (4.5trn
aging director Moin Raza Khan. cubic metres) of recoverable unconventional gas
Should a commercial discovery be made, the resources.
consortium has the right to a minority share in The company said it “intends to engage with
the subsequent 35-year production concession, potential partners for unconventional resource
with ADNOC taking its customary 60% hold- licensing opportunities around this geographi-
ing. The 6,223-square km acreage covers an area cal area [which] contains some of the unconven-
north of the 50bn barrel Upper Zakum oilfield. tional resources discovered that have production
Last month, the consortium formed a spe- potential ranking alongside the most prolific
cial purpose vehicle (SPV), with each member North American shale oil plays”.
holding an equal 25% share in Pakistan Interna- In February, ADNOC awarded Offshore
tional Oil Ltd, which has been registered on the Block 4 to the local subsidiary of Japan’s Cosmo
Abu Dhabi Global Market (ADGM). Another Energy, which is the majority owner of Abu
precursor to the deal was the approval by the Dhabi Oil Co. (ADCO) and is predominantly
government of Pakistan to invest $400mn in the known as a refining specialist. As is the norm,
block, which at that point was unspecified. Cosmo took a 100% stake in the exploration
The Economic Coordination Committee phase, with ADNOC retaining an option for
approved a summary of the “Petroleum Division 60% of the production phase. The contract was
regarding no objection certificate for issuance of signed for a term of 35 years, with Cosmo agree-
the parent company guarantees/corporate guar- ing to spend up to $145mn on exploration and
antees by each of the consortium companies, on appraisal drilling, including a participation fee,
a joint and several basis”. across the 4,865-square km offshore concession.
Last month, PPL, OGDL and Mari Petro- The deal follows similar agreements in
leum Company Ltd approved the guarantees in December with US-based Occidental Petro-
favour of ADNOC and the Supreme Council for leum for onshore Block 5 and with a consortium
the Financial and Economic Affairs (SCFEA), of Italy’s Eni and Thailand’s PTT Exploration and
which will assume the regulatory powers of the Production (PTTEP) for Offshore Block 3.
Supreme Petroleum Council (SPC). As with those agreements, ADNOC noted
In a stock exchange filing, Mari Petroleum that Cosmo would “leverage and contribute
said: “In case the block is not awarded to the con- financially and technically” to the ongoing mega
sortium, the NewCo shall be dissolved.” seismic survey currently being carried out by
Block 5 and the rest of the blocks included in China National Petroleum Corp. (CNPC) geo-
the second round cover large areas throughout physical specialist subsidiary BGP. The scope of
Abu Dhabi, comprising a total acreage of 34,000 the 3D onshore and offshore survey was recently
square km. Onshore Block 2 is in the south-west, expanded from around 53,000 square km to
bordering Saudi Arabia, while Onshore Block 5 82,000 square km, taking the total value of the
borders Oman in the south-east. The offshore contract to $2.12bn. The Pakistani consortium
blocks cover the majority of Abu Dhabi’s off- will be involved in the survey on the same terms
shore area. as the other second round signatories.™

P6 www. NEWSBASE .com Week 35 02•September•2021