ADNOC Set To Decide On Revised Concession Bids From BP, Shell -Sources
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ADNOC Set To Decide On Revised Concession Bids From BP, Shell -Sources

ADNOC Set To Decide On Revised Concession Bids From BP, Shell -Sources

BP and Shell were asked to raise their signing bonus, a source told Reuters, in line with France’s Total, which has already renewed its concession.

Gulf Business

Abu Dhabi National Oil Company (ADNOC) is expected to respond this week to revised bids from BP and Royal Dutch Shell for stakes in a 40-year onshore oilfield concession, industry sources familiar with the matter said on Monday.

BP and Shell were asked to raise their signing bonus, which is paid in advance in cash, one source told Reuters, in line with that offered by France’s Total, which has already renewed its concession.

“BP and Shell have made their (revised) offers, their bids are received well,” a second source told Reuters. ADNOC could make its announcement “soon”, the source said.

ADNOC signed an agreement on January 29 with Total giving the firm a 10 per cent stake in the new concession to help operate the United Arab Emirates’ biggest oilfields.

Shell and BP are also expected to get 10 per cent stakes, if they agree to ADNOC’s terms, while Asian newcomers may take the remaining shares, a second source said.

“Shell has been present in Abu Dhabi for over seven decades, and our aspiration is to continue to be a partner in the Emirate’s energy future,” a Shell spokesman said.

BP could not immediately be reached for comment.

A total of nine firms bid for stakes in the Abu Dhabi Company for Onshore Oil Operations (ADCO) concession which became available after a 40-year deal with Western oil companies expired in January 2014.

ExxonMobil, Shell, Total and BP each held 9.5 per cent equity stakes in that ADCO concession.

After the deal expired last year, ADNOC took 100 per cent of the concession as political leaders in Abu Dhabi weighed up whether to bring in Asian firms, industry and diplomatic sources said.

Shell, Total and BP have made new bids, while Exxon has decided against bidding.

Other bidders include U.S. firm Occidental Petroleum Corp, Italy’s ENI, China National Petroleum Corp. (CNPC), Norway’s Statoil, Korea National Oil Corp. and Japan’s Inpex.

Each company submitted a proposal for a 5 per cent stake and another for a 10 per cent stake.

The fields produce 1.6 million barrels per day (bpd) and are expected to reach 1.8 million bpd from 2017.

In the new concession, the companies are expected to receive a per-barrel fee of around $2.85 versus $1 under the previous concession, the first source said.


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