Mon 05-12-2022 21:51 PM
ABU DHABI, 5th December, 2022 (WAM) -- President His Highness Sheikh Mohamed bin Zayed Al Nahyan and the King of Malaysia His Majesty Seri Paduka Baginda the Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin AlMustafa Billah Shah Ibni Almarhum Sultan Haji Ahmad Shah Al-Musta’in Billah have witnessed the signing of a historic concession agreement between Abu Dhabi National Oil Company (ADNOC) and PETRONAS for Abu Dhabi’s Unconventional Onshore Block 1. The pioneering award to Malaysia’s national oil and gas company launches the Middle East’s first unconventional oil concession.
The award builds on the strong bilateral ties between the UAE and Malaysia and marks the first time a Malaysian company will invest in and explore for hydrocarbons in Abu Dhabi.
The award also highlights the confidence in the potential of Abu Dhabi’s substantial unconventional recoverable oil resources.
Under the six-year concession agreement, PETRONAS will hold a 100% stake and operatorship to explore for and appraise unconventional oil in Unconventional Onshore Block 1. The block covers an area of more than 2,000 square kilometers in Al Dhafra region in the Emirate of Abu Dhabi.
The concession agreement was signed by Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Managing Director and Group CEO of the Abu Dhabi National Oil Company (ADNOC), and Datuk Tengku Muhammad Taufik, President and Group CEO of PETRONAS, during the Malaysian King’s visit to the UAE.
Dr. Al Jaber said: “We are delighted to partner with PETRONAS on this historic unconventional oil concession. This award ushers a new chapter of strategic energy cooperation in the long-standing relationship between the UAE and Malaysia, and it reinforces the UAE’s position as a trusted investment destination.
“As one of the least carbon intensive oil and gas producers, ADNOC will continue to responsibly unlock value from Abu Dhabi’s vast hydrocarbon resources in a reliable and sustainable manner, to drive local economic growth and support global energy security, in line with the wise directives of the UAE’s leadership. As such, we have driven the de-risking of Abu Dhabi’s unconventional oil resources and look forward to building on this with PETRONAS to realize the full potential of Unconventional Onshore Block 1.”
The concession award enables PETRONAS to capitalise on ADNOC’s prior exploration and de-risking activities. PETRONAS brings its global experience in unconventional operations and both companies have a strong track record and commitment to responsible operations with a focus on lower-carbon oil and gas production.
Taufik said this development is a red-letter day for PETRONAS: “I am very pleased to note that the United Arab Emirates and Malaysia’s long and fruitful bilateral ties have progressed to a partnership between PETRONAS and ADNOC. PETRONAS is honoured to have this opportunity to explore and appraise unconventional energy with a progressive and forward-looking partner such as ADNOC.
“This partnership bears strong testament to deep unconventional expertise in Canada and Argentina, which we developed over the last decade, and we look forward to bringing this experience to the world-class resources in Abu Dhabi. It will also see PETRONAS widen its global unconventional energy footprint to include the United Arab Emirates in its existing portfolio.”
Following a successful appraisal phase, the parties can enter a production concession with a term of 30 years from the first award of the concession to PETRONAS, with ADNOC having the option to hold a 50% stake in the production concession. The block offers the potential to create significant in-country value for the UAE over the lifetime of the concession.
The agreement will see PETRONAS leverage and contribute financially to ADNOC’s ongoing three-dimensional (3D) mega seismic survey which has already acquired seismic data within the concession area.
Abu Dhabi’s unconventional recoverable oil resources are estimated at 22 billion barrels of very light and sweet crude, comparable to ADNOC’s flagship lower-carbon Murban grade. These independently verified resources have production potential comparable to the most prolific North American unconventional plays.