The Indian consortium won the exploration rights for Block 1 following a competitive bid round. Credit: Abu Dhabi National Oil Company.

A consortium of two Indian oil companies has been awarded the exploration rights by the Abu Dhabi National Oil Company (Adnoc) for an onshore block in Abu Dhabi, UAE.

The consortium of Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL) will own a 100% stake in Abu Dhabi Onshore Block 1 during the exploration phase.

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According to the 35-year concession agreement, the consortium will invest up to AED626m ($170m) to explore for and appraise oil and gas in the block. The investment will include a participating fee.

The concession award for the block comes after a competitive bid round and follows Adnoc award of the exploration rights for Onshore Block 4 to Inpex, a Japanese oil company.

Upon successful exploration and appraisal, the Indian consortium will be allowed to develop and produce any discoveries.

“The consortium of BPCL and IOCL, both of whom Adnoc already partners with offshore, was selected after a very competitive bid round.”

The agreement includes an option for Adnoc to retain a 60% stake in the production phase.

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Adnoc Group CEO Dr Sultan Ahmed Al Jaber said: “It also underlines ADNOC’s 2030 smart growth strategy and our targeted approach to engage with value-add partners who can contribute the right combination of market-access, capital and technology, as we reinforce our position as an essential energy provider to the world.

“The consortium of BPCL and IOCL, both of whom Adnoc already partners with offshore, was selected after a very competitive bid round.

“The open bidding process represents a major advance in how Adnoc is accelerating the exploration and development of Abu Dhabi’s substantial untapped hydrocarbon resources as we continue to maximise value, in line with the UAE leadership’s directives.”

Onshore Block 1 covers an area of 6,162km around Ruwais and comprises undeveloped conventional oil and gas fields.

The block area also includes the separate Ruwais Diyab unconventional gas concession, where Adnoc’s partner Total has exploration rights for tight gas resources in the Diyab formation.

The award of Block 1 marks the end of the competitive block bid round. Adnoc also awarded onshore Block 3 to Occidental Petroleum.

Offshore blocks were also awarded to a consortium of Eni and PTTEP.