ADNOC awards exploration rights for Abu Dhabi’s offshore block 5 to Pakistani consortium

The Abu Dhabi National Oil Company (ADNOC) has announced the signing of an exploration concession agreement, awarding the exploration rights for Abu Dhabi’s Offshore Block 5 to a consortium of four Pakistani companies.

The companies consist of Pakistan Petroleum Limited (PPL), which is leading the consortium, as well as Mari Petroleum Company Limited (MPCL), Oil and Gas Development Company Limited (OGDCL), and Government Holdings (Private) Limited (GHPL) – in Abu Dhabi’s second competitive block bid round. PPL operates 15 producing fields across Pakistan and contributes over 20 per cent of the country’s total natural gas supplies.

As per the agreement, the consortium will hold a 100 per cent stake in the exploration phase, investing up to $304.7m (Dhs1.12bn) towards exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an offshore area of 6,223 square kilometers and is located 100 kilometers north east of Abu Dhabi city.

The agreement marks the first time Pakistani companies will invest in and explore for oil and gas in an Abu Dhabi concession as well as the first time ADNOC has partnered with Pakistani energy companies.

We have signed an agreement awarding exploration rights for Abu Dhabi’s Offshore Block 5 to a consortium of Pakistani companies, bringing more than $300m worth of investment into the UAE and building on the deep-rooted ties between our countries.https://t.co/I4ITg9yrva #ADNOC pic.twitter.com/z8HLJ17SA4

— ADNOC Group (@AdnocGroup) August 31, 2021

Following a successful commercial discovery during the exploration phase, the consortium will have the right to a production concession to develop and produce such commercial discoveries.

ADNOC has the option to hold a 60 per cent stake in the production phase of the concession. The term of the production phase is 35 years from the commencement of the exploration phase and the block offers the potential to create significant in-country value for the UAE over the lifetime of the concession.

In addition to drilling exploration and appraisal wells, the exploration phase will see the consortium leverage and contribute financially and technically to ADNOC’s mega seismic survey, which is acquiring 3D seismic data within the block area. The data already acquired over a large part of the block combined with its proximity to existing oil and gas fields, suggests the concession area has promising potential.

The exploration concession agreement was signed by Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and managing director and group CEO of ADNOC, and Moin Raza Khan, managing director and CEO of PPL.

Dr. Al Jaber said: “This historic exploration concession award marks a new chapter of energy cooperation in the 50-year old UAE-Pakistan relationship. It represents an important platform upon which we can drive win-win opportunities to support Pakistan’s energy security and further strengthen the strategic and economic ties between our two countries. We are delighted to partner with Pakistan Petroleum Limited and the other members of the consortium on Offshore Block 5.

“The consortium was selected as part of Abu Dhabi’s block bid round where we have once again reinforced our approach to strategic partnerships that contribute the right combination of market access, capital, best-in-class expertise or advanced technology.”

Khan said: “The PPL-led consortium is delighted to be selected for the concession award of Abu Dhabi’s Offshore Block-5. This award is not only a watershed moment for Pakistan and the emirate of Abu Dhabi towards bilateral energy cooperation and economic links but also offers an opportunity to strengthen strategic cooperation with ADNOC to share technical know-how and expertise.”

ADNOC launched Abu Dhabi’s second competitive block bid round in 2019, offering a set of major onshore and offshore blocks, on behalf of the Abu Dhabi government.

Following ADNOC’s recent discoveries of 22 billion stock tank barrels (STB) of recoverable unconventional oil resources and 160 trillion standard cubic feet (SCF) of recoverable unconventional gas resources, it was decided not to award an exploration license for Onshore Block 2.

Read: Abu Dhabi confirms massive oil discovery, set to add Dhs160bn to the UAE’s economy

As part of Abu Dhabi’s second block bid round, ADNOC awarded Offshore Block 4 to a wholly-owned subsidiary of Cosmo Energy Holdings Co., Ltd.; Offshore Block 3 to a consortium led by wholly owned subsidiaries of Eni and PTT Exploration and Production Public Company Limited (PTTEP); and Onshore Block 5 to Occidental.