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Adnoc inks first unconventional oil deal

People, Person, Man WAM
Adnoc and Petronas have signed a six-year contract

State-owned Abu Dhabi National Oil Company (Adnoc) and Malaysia’s Petroliam Nasional Berhad (Petronas) have signed a deal awarding the first concession in the Middle East for unconventional oil resources, the UAE state news agency WAM said.

The six-year agreement is the first investment by a Malaysian company in an Abu Dhabi concession.

Petronas will retain a 100 percent stake in the operating rights of the concession to explore and appraise resources in unconventional onshore block 1, which covers an area of more than 2,000 square kilometres in the Al Dhafra region of Abu Dhabi.

“Adnoc will continue to responsibly unlock value from Abu Dhabi’s vast hydrocarbon resources in a reliable and sustainable manner,” said Adnoc group chief executive officer Sultan Ahmed Al-Jaber.

“We have driven the de-risking of Abu Dhabi’s unconventional oil resources and look forward to building on this with Petronas to realise the full potential of unconventional onshore block 1,” Al-Jaber, who is also the minister of industry and advanced technology, added.

Following a successful appraisal phase, the companies can enter a production concession of 30 years from the first award of concession to Petronas.

Adnoc will have the option to hold a 50 percent stake in the concession, which offers the potential to create significant in-country value for the UAE, the report stated. 

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. 

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