• 5 minutes Oil prices forecast
  • 8 minutes Nuclear Power Can Be Green – But At A Price
  • 11 minutes Projection Of Experts: Oil Prices Expected To Stay Anchored Around $65-70 Through 2023
  • 16 minutes Europe Slipping into Recession?
  • 5 hours *Happy Dance* ... U.S. Shale Oil Slowdown
  • 8 hours Emissions from wear of brakes and tyres likely to be higher in supposedly clean vehicles, experts warn
  • 5 hours UK, Stay in EU, Says Tusk
  • 14 hours How Is Greenland Dealing With Climate Change?
  • 9 hours Socialists want to exorcise the O&G demon by 2030
  • 12 hours Is Natural Gas Renewable? I say yes it is.
  • 14 hours Germany: Russia Can Save INF If It Stops Violating The Treaty
  • 27 mins Algorithms Taking Over Oil Fields
  • 2 days Maritime Act of 2020 and pending carbon tax effects
  • 1 min Blame Oil Price or EVs for Car Market Crash? Auto Recession Has Started
  • 3 days Connection Between Climate Rules And German's No-Limit Autobahns? Strange, But It Exists
  • 21 hours Saudi Private Jet Industry Stalls After Corruption Crackdown
Papua New Guinea Clans Unite Against Exxon

Papua New Guinea Clans Unite Against Exxon

Disgruntled Papua landowners are standing…

U.S. ‘Tough Line’ On Iran Depends On Crude Prices

U.S. ‘Tough Line’ On Iran Depends On Crude Prices

As the White House compliments…

BP Acquires A 10 Percent Stake In UAE Oil Fields

Abu Dhabi

BP has acquired 10 percent of the Abu Dhabi Company for Onshore Petroleum Operation’s (ADCO) oil concessions in a $2.2 billion shares swap deal with the Abu-Dhabi emirate. BP will pay for its stake by transferring 2 percent of its share capital to the Abu Dhabi government, as multiple media sources reported on Saturday when the deal was announced.

As part of the deal, BP will become the concession holder of the Bab Bu Hasa, Shah and Asab oilfields, which it will operate over the next 40 years. The aforementioned oil fields account for as much as 30 billion barrels of oil equivalent over the 40 years, Bloomberg reported.

As BP CEO Bod Dudley told Bloomberg “this deal will provide an output of 160,000 barrels a day, in addition to the 95,000 barrels BP now produces in Abu Dhabi”.

BP has been conducting operations in Abu Dhabi oilfields since 1939 and held a 9.5 percent stake in ADCO’s onshore fields since the 1970s. The concession expired in 2014, and since then Abu Dhabi has been negotiating and selecting foreign oil companies for partnerships again, although the low oil-prices have been slowing down the concession awards process, as low payment terms per barrel discouraged commitment to long-term investment contracts.

However, since the onset of the oil prices slump, the government of the UAE, which is the fifth largest OPEC producer, has been looking for ways to maximize their oilfields’ recovery rates, boosting them from 40 percent to as high as 70 percent, which could bring an influx of extra revenue worth billions of dollars over the lives of the fields.

According to The National, an Abu-Dhabi based newspaper, the decision by the Abu-Dhabi Supreme Petrol Council to award concessions to potential ADCO stakeholders ultimately came down to the bidding companies’ proposals on enhanced oil recovery expertise and usage of advanced technology for this process, where BP apparently had a competitive advantage.

The BP global field experience has allowed Abu-Dhabi to develop the deep expertise and innovative technologies needed to increase recovery factors and extend the field life of the mature on-shore fields by introducing EOR (enhanced oil recovery) techniques such as low salinity water injection LoSal® EOR and Brightwater™. In 2014, BP introduced a new piece of EOR technology called robotic core flooding system.

Related: Saving U.S. Infrastructure – Can Trump Do It?

As Sultan Al Jaber, the chief executive of Abu Dhabi National Oil Company (Adnoc) and Minister of State, shared with press: "This agreement marks a milestone in our efforts to forge new partnership models that bring technology, expertise and financing aimed at maximizing the value of our resources and supporting the transfer of knowledge."

According to the BP CEO, the signed concession agreement will also give the UK oil giant access to significant and competitive resources that they already have a deep knowledge of.

"We will bring our people, cutting-edge technology and experience of managing mature giant fields around the world to help maximize recovery from these assets,” said Dudley.

The specific compensation details of the deal have not been disclosed by ADCO or BP so far, but BP’s chief financial officer, Brian Gilvary pointed at the low-cost characteristics of the concession’s onshore conventional brownfields as being pivotal in generating higher earnings and cash flow, while giving BP another asset base for long term growth.

Related: These Nations Lead The Renewables Revolution

According to some Industry estimates, the compensation for the concession stakeholders is less than $2 per barrel, but statements by Total executives, which also owns a 10 percent stake in the Abu Dhabi onshore concessions, suggest that the deal offers incentives for exceeded targets on the oilfield developments, and it leaves room for potential improvement of terms for trading the oil they receive.

Abu Dhabi’s 2 percent stake will make it one of BP’s biggest shareholders. Kuwait, which is OPEC’s fourth largest oil producer, owns 1.7 percent of BP.

BP also holds a 14.67 percent stake in the Abu Dhabi Marine Operating Company (Adma-Opco) offshore concession, and 10 percent interests in both the Abu Dhabi Gas Liquefaction Company (Adgas) and the National Gas Shipping Company (Ngsco).

By Ekaterina Pokrovskaya for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News