Abu Dhabi National Oil Company (Adnoc) awarded Eni two stakes in the emirate’s offshore concession areas in 40-year agreements for a combined $875 million, marking the Italian oil major’s entry in the UAE’s oil and gas sector, following recent wins in Egypt and Cyprus.
The Italian firm won a 10 per cent stake in the Umm Shaif and Nasr concession as well as a five per cent share of Lower Zakum – fields that were previously part of the Adma-Opco entity.
“Our partnership with Eni, and other concession partners, will enable us to accelerate our growth, increase revenue and improve integration across the upstream value chain, as part of our ongoing transformation and build on the foundations that have been laid to deliver a more profitable upstream business,” said Dr Sultan Al Jaber, UAE minister of state and Adnoc group chief executive.
Eni, which joins an Indian consortium led by ONGC Videsh and Japan’s Inpex in Lower Zakum, paid a participating fee of Dhs1.1bn ($300m) for its stake. It also paid Dhs2.1bn ($575m) to enter Umm Shaif and Nasr. The twin concessions will be operated by Adnoc Offshore on behalf of all partners. Adnoc will retain a 60 per cent stake across the various split concessions, with the remainder shared between various partners.
Abu Dhabi’s recent partners on the various offshore concessions up for renewal this month have so far been from Asia, reflecting the company’s pivot to secure market access in the East.
Eni’s involvement, analysts suggest, could be a way to balance Adnoc’s current mix of partners and also to bring on the Italian firm’s expertise in large-scale gas exploration offshore the Eastern Mediterranean at a time when Abu Dhabi is also strongly focussed on unlocking gas potential.
“This is the first award by Adnoc to a major in the offshore renewal, and shows it is looking to find a balance in its strategic partners between companies from major buyers (Japan, India) and IOCs [international oil companies] with technology and project delivery expertise,” said Tom Quinn, Dubai-based research analyst with energy consultancy Wood Mackenzie.