French Total has signed two 40-year concessions worth a combined US$1.45-billion with the Abu Dhabi National Oil Company, or Adnoc. The concessions are for 20 percent in the Umm Shaif and Nasr concession and for 5 percent in the Lower Zakum concession-both offshore.
The concessions will add 80,000 barrels daily to Total's overall production.
Total also extended its concession of the Abu Al Bu Koosh field by three years. The French company has a 100-percent stake in the field.
Umm Shaif and Nasser, and Lower Zakum were part of a larger concession dubbed ADMA-OPCO. Adnoc decided to break this concession into three smaller ones, including Lower Zakum, Umm Shaif and Nasr, and Umm Lulu and Al Razboot. The company put them up for grabs as the current concessions had either already expired in February or were due to expire this month.
Before Total, an Indian consortium including the state giant ONGC snapped up 10 percent in Lower Zakum worth US$600 million. The acquisition was notable in that it was the first foreign oil concession purchase by Indian companies in the UAE.
The fields making up the ADMA-OPCO concession produce around 700,000 bpd, but their capacity is on track to be expanded to 1 million bpd over the next three years. Adnoc is now looking to award another 10 percent in Lower Zakum, retaining 60 percent in the concession. More bidders are also sought for the other two new concessions after the split of ADMA-OPCO.
Related: The Truth About Aramco's $2 Trillion Valuation
The UAE has proven oil reserves of 97.8 billion barrels and is tasked with producing no more than 2.87 million bpd under the OPEC+ oil production cut agreement. Despite this quota, Adnoc has plans to boost its production capacity from the current 3.2 million bpd to 3.5 million bpd by the end of the year.
Besides Total and the ONGC-led consortium, the company has granted concessions to Exxon, BP, Shell, Inpex, CNPC, and Spanish Cepsa.
By Irina Slav for Oilprice.com
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