UAE’s ADNOC signs $1.5bn offshore concession deal with Spain’s Cepsa

The two companies are also working together on a petrochemicals complex



Abu Dhabi National Oil Company (ADNOC) has signed a $1.5bn offshore concession agreement with Spanish oil and gas firm Cepsa.

The 40-year deal gives Cepsa, which is wholly-owned by Abu Dhabi’s Mubadala Investment Company, a 20 per cent stake in the SARB and Umm Lulu concession from March 9.

This comprises part of the former ADMA offshore concession, SARB and the smaller Bin Nasher and Al Bateel fields. ADNOC will retain a 60 per cent stake through ADNOC Offshore.

ADMA was split into three new concession to enhance commercial value for ADNOC. Earlier this month it awarded a 10 per cent stake in one of the new fields to a consortium of Indian companies – ONGC Videsh, Indian Oil Corporation and Bharat PetroResources.

Read: UAE’s ADNOC awards 10% stake in offshore concession to Indian consortium

“The agreement reflects ADNOC’s new partnership approach, as we expand and diversify our partner base across ADNOC’s integrated value chain,” said ADNOC group CEO and minister of state Dr. Sultan bin Ahmad Sultan Al Jaber.

“Reflecting our strategic approach, we are also working with Cepsa to explore expansion opportunities in our downstream business, in the UAE and overseas, that will deliver competitive returns and long term growth opportunities for both parties, and for the UAE.”

Cepsa’s operations span exploration, production, refining, distribution and marketing, chemicals, gas and power, trading, bunkering and renewable energy sources. In 2016 it produced 35.4 million barrels of oil, distilled 158.7 million barrels of crude oil and sold 28.3 million tons of petroleum products, according to the announcement.

The company signed a framework agreement with ADNOC in November to evaluate a new world-scale Linear Alkyl Benzene complex in Ruwais, Abu Dhabi. Basic engineering of the project is expected to begin this year.

ADNOC plans to more than triple its petrochemical production to 14.4 metric tonnes per annum by 2025.

The state oil company said it was also finalising concessions deals for the remaining stakes in the SARB and Umm Lulu, the Lower Zakum and the Umm Shaif and Nasr concessions.

It plans to raise its oil production capacity to 3.5 million barrels a day this year.