The first participation of Pakistani companies in oil and gas exploration concessions in Abu Dhabi.
The agreement strengthens the historical bilateral relations between the UAE and Pakistan.
– A consortium led by the Pakistan Petroleum Company Limited obtains an oil and gas exploration concession in “Offshore Zone 5” and invests 1.12 billion dirhams during the exploration phase.
The award of the concession confirms ADNOC’s approach to expanding the scope of strategic partnerships and concludes the second round of competitive bidding launched by Abu Dhabi to issue licenses for new areas.
ABU DHABI, 31st August / WAM/ The Abu Dhabi National Oil Company “ADNOC” announced today the signing of a historic concession agreement with a consortium of four Pakistani companies: “Pakistan Petroleum Company Limited” (BPL) and “Mary Petroleum Company Limited” /M BCL/, “Oil and Gas Development Company Limited” (OGDCL), and “Government Private Holding Company Limited” (GHPL).
The consortium led by the Pakistan Petroleum Company Limited (PPL) obtained oil and gas exploration rights in Abu Dhabi’s offshore Block 5, as part of the second round of competitive bidding launched by Abu Dhabi as part of its strategy to issue licenses for new areas.
This agreement marks the first time that Pakistani companies have invested in oil and gas exploration concessions in the Emirate of Abu Dhabi, and is the first partnership between ADNOC and Pakistani energy companies.
This historic agreement benefits from the close cooperation relations between the UAE and the Islamic Republic of Pakistan, and also confirms ADNOC’s approach to expanding the scope of strategic partnerships and joint investments with partners capable of facilitating the access of its crude oil and petroleum derivatives products to key growth markets.
The agreement was signed by His Excellency Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology, Managing Director and CEO of Abu Dhabi National Oil Company “ADNOC” and its group of companies, and Moin Raza Khan, Managing Director and CEO of Pakistan Petroleum Company Limited.
His Excellency Dr. Sultan bin Ahmed Al Jaber said: “In line with the wise leadership’s directives to achieve the maximum possible value from Abu Dhabi’s oil and gas resources, this historic agreement was signed in which we awarded a concession for oil and gas exploration to a consortium that includes a number of Pakistani companies. This agreement represents a stage New cooperation in the energy sector between the UAE and the Republic of Pakistan, which enjoy close relations spanning fifty years in various sectors, as this agreement provides more important opportunities that can achieve mutual benefits such as supporting energy security and contributing to strengthening the strategic and economic partnership relations between the two countries. We are pleased to partner and cooperate with the ‘Pakistan Petroleum Company Limited’ and other consortium member companies to explore oil and gas in ‘Offshore Block 5’ to achieve mutual benefits and interests.”
His Excellency added: “The selection of the consortium, which includes a number of Pakistani companies working in the energy field, as part of the second round of competitive bidding launched by Abu Dhabi to issue licenses for new areas, confirms ADNOC’s approach to expanding the scope of strategic partnerships and joint investments with partners that enjoy important advantages such as market access and capital. We are optimistic and confident of our ability to achieve maximum value from these resources through cooperation with our partners in the second round of competitive bidding, as part of our continuous endeavor to accelerate the pace of exploration and development of Abu Dhabi’s untapped hydrocarbon resources in line with the directives of the wise leadership.” .
Under the terms of the agreement, the consortium will obtain a 100% stake in the exploration phase, and will invest up to 1.12 billion dirhams ($304.7 million), including participation fees, in exploration, drilling exploration and appraisal wells to explore and evaluate oil and gas opportunities in the “Offshore Area No. 5”, which covers an area of 6,223 square kilometers and is located 100 km northeast of Abu Dhabi.
On his part, Moin Raza Khan said: “As a consortium led by Pakistan Petroleum Limited, we are pleased to have been selected in the awarding process of the ‘Offshore Block 5’ concession in Abu Dhabi. There is no doubt that this agreement represents an important step in the process of bilateral cooperation between Pakistan and Abu Dhabi Emirate in the field of It also provides an opportunity to strengthen strategic cooperation with ADNOC to exchange knowledge and technical expertise between the two sides.”
He added, “We are particularly excited that this alliance includes four major national exploration and production companies, which are ready to contribute to strengthening ADNOC and Abu Dhabi’s leading position in the global energy sector.”
In the event that successful commercially viable discoveries are made during the exploration phase, the consortium will obtain the right to develop and produce these commercially viable discoveries. ADNOC has the option to retain a 60% stake in the concession production phase, which is 35 years from the start of the exploration phase. The award of “Marine Zone 5” will provide more promising opportunities in enhancing the local added value in the country during the concession period.
In addition to drilling, exploration and evaluation of exploratory and appraisal wells, the exploration phase will witness the consortium’s financial and technical contribution to the huge geophysical survey project implemented by ADNOC, which provides accurate three-dimensional data on the concession area. Survey data that has already been conducted over a large area of this region, which is located near existing oil and gas fields, indicates that it has promising potential.
ADNOC launched the second round of Abu Dhabi’s competitive bidding in 2019, where it offered on behalf of the Abu Dhabi government a group of key land and sea areas. The award of ‘Marine Zone 5’ to the Pakistani consortium concludes the second round of Abu Dhabi’s competitive bidding, which saw highly competitive bids submitted for the geographical areas offered.
Following ADNOC’s recent discoveries of 22 billion barrels of onshore recoverable unconventional oil resources, and 160 trillion standard cubic feet of recoverable unconventional gas resources, it has been decided not to award the exploration license to Onshore Block 2. ADNOC intends to cooperate with potential partners to license unconventional resources in this region, which contains unconventional resources of comparable quality to shale oil production in North America.
As part of the second round of Abu Dhabi’s competitive bidding, ADNOC awarded the concession to explore “Offshore Zone 4” in Abu Dhabi to a company wholly owned by the Japanese “Cosmo Holdings”, and “Offshore Zone 3” to a consortium led by Eni Abu Dhabi BP. In, wholly owned by the Italian energy company Eni, PTTEP Middle East and North Africa, wholly owned by Thailand’s PTTEP, and Land Area No. 5 on the US Occidental.
Based on the available data from detailed studies of the petroleum system and geophysical surveys obtained from exploration and evaluation wells, it is estimated that the new areas within the second round of competitive bidding contain significant resources estimated at several billion barrels of oil and trillions of cubic feet of natural gas.
Pakistan Petroleum Company Limited operates 15 producing fields across Pakistan and contributes more than 20% of its total natural gas supplies. As of June 2020, the company’s proven recoverable reserves were 1793.5 billion cubic feet of natural gas, 13.3 million barrels of oil/LNG/condensate and 543.1 thousand tons of LPG.