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Eni awarded stakes in two offshore oil producing concessions in UAE

EBR Staff Writer Published 12 March 2018

Italian oil and gas firm Eni has been awarded two stakes in two offshore producing concessions in UAE by the state-owned oil company, Abu Dhabi National Oil Company (Adnoc), in deals worth AED3.2bn ($875m) in total.

As part of the 40-year agreements, the Italian firm won a 10% stake in the Umm Shaif and Nasr concession as well as a 5% stake in the Lower Zakum.

Eni said that the agreements will provide access to a country that has one of the largets hydrocarbons reserves in the world.

Eni CEO Claudio Descalzi said: “The stakes in the two concessions give access to giant fields with huge potential and Eni is willing to contribute its best technology to maximize the future production.”

The two concessions, however, will be operated by Adnoc Offshore, a subsidiary of Adnoc, on behalf of all concession partners.

Adnoc noted that the award marks the first concession rights offering to an Italian energy company in the country’s oil and gas sector.

Adnoc Group CEO Dr Sultan Ahmed Al Jaber said: “These agreements underline the international market’s confidence in Adnoc’s long-term growth plans and the UAE’s stable and reliable investment environment.

“They also broaden and diversify our partnership base, while contributing experience, technology, capital and market access.

“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.”

Located about 65km off the coast of Abu Dhabi, the Lower Zakum field commenced production in 1967. It has a target production capacity of 450,000 barrels of oil per day.

The Umm Shaif and Nasr concessions are located about 135km from the coast of Abu Dhabi. They have a target production capacity of 460,000 barrels of oil per day.

Descalzi added: "Eni is committed to apply its experience in the development and production of world-class oil and gas resources, as well as Eni's technology portfolio, in support of Adnoc's objectives to cost-effectively increase production capacity, efficiently manage the concessions' assets and sustain the plateau through targeted enhanced oil recovery programs, at competitive cost.”

Eni will join an Indian consortium, led by ONGC Videsh, and Japan's Inpex as partners in the Lower Zakum concession.

Adnoc plans to finalize opportunities with potential partners for the remaining 15% stake in the Lower Zakum concession as well as for the remaining 30% interest in the Umm Shaif and Nasr concession. The firm, however, will retain 60% stake in both the concessions.

Image: Officials from Adnoc and Eni during signing of concession agreements. Photo: courtesy of PRNewsfoto/Abu Dhabi National Oil Company.