President Sheikh Mohamed and Malaysia's king, Sultan Abdullah Sultan Ahmad Shah, witness the signing of the agreement by Dr Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Adnoc’s managing director and group chief executive, and Datuk Tengku Muhammad Taufik, president and group chief executive of Petronas. Photo: UAE Presidential Court
Abu Dhabi National Oil Company (Adnoc) signed a deal with Malaysia's Petroliam Nasional Berhad (Petronas) on Monday for Abu Dhabi’s Unconventional Onshore Block 1.
The block covers an area of more than 2,000 square kilometres in the emirate's Al Dhafra region.
The award to Malaysia’s national oil and gas company launches the Middle East’s first unconventional oil concession, Wam reported.
“We are delighted to partner with Petronas on this historic unconventional oil concession,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and Adnoc’s managing director and group chief executive.
“This award ushers a new chapter of strategic energy co-operation in the long-standing relationship between the UAE and Malaysia, and it reinforces the UAE’s position as a trusted investment destination.”
Under the six-year concession agreement, Petronas will hold a 100 per cent stake and operatorship to explore and appraise unconventional oil in Unconventional Onshore Block 1.
The concession agreement was signed by Dr Al Jaber and Datuk Tengku Muhammad Taufik, president and group chief executive of Petronas. UAE President Sheikh Mohamed and the king of Malaysia, Sultan Abdullah Sultan Ahmad Shah, witnessed the signing.
“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,” Dr Al Jaber said.
“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 realise the full potential of Unconventional Onshore Block 1.”
Following a successful appraisal phase, the entities can enter a 30-year production concession from the first award of the concession to Petronas, with Adnoc having the option to hold a 50 per cent stake, Wam reported.
The agreement will allow Petronas to contribute to Adnoc’s ongoing three-dimensional mega seismic survey, which has already acquired seismic data within the concession area.
“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,” Mr Taufik said.
“It will also see Petronas widen its global unconventional energy footprint to include the United Arab Emirates in its existing portfolio.”
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, according to Wam.
These independently verified resources have production potential comparable to the most prolific North American unconventional plays.
