Onshore Block 3 covers an area of 5,782 square kilometres in the Al-Dhafra region. Credit: Shutterstock.

US energy company won full exploration rights in Abu Dhabi’s Onshore Block 3 in 2019, as well as for Onshore Block 5 in December, which lie adjacent to each other.

Occidental Petroleum (Oxy) has announced making a discovery of hydrocarbon reserves in Abu Dhabi’s Onshore Block 3.

Abu Dhabi National Oil Company (Adnoc) in February 2019 awarded Oxy 100 per cent exploration rights for Onshore Block 3 offered to international upstream players in Abu Dhabi’s first-ever licensing round launched in 2018.

Oxy in December 2020 also won full exploration rights for Abu Dhabi Onshore Block 5, which was offered by Adnoc to foreign energy companies in Abu Dhabi’s second upstream licensing round.

“Following the award of Block 5, we made a multi-reservoir discovery in Block 3. We still have more exploration and appraisal work to complete, but are highly encouraged by the results to date,” Oxy CEO Vicki Hollub said during the company’s quarterly results conference call.

Hollub earlier said Oxy has “completed two exploration wells with extremely promising results” in Onshore Block 3, without mentioning further details.

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Onshore Block 3 covers an area of 5,782 square kilometres in the Al-Dhafra region. Existing 3D seismic data already covers a large part of the block, which, combined with its proximity to the Shah, Asab, Haliba and Sahl fields, suggests the concession area has “very promising potential”, Adnoc said at the time of awarding the block to Oxy in February 2019.

Under the terms of the 35-year concession agreement for Onshore Block 3, Oxy holds a 100 per cent stake in the exploration phase, investing $244m, including a participation fee, to explore for oil and gas.

The company said initial spending on exploration was low in Abu Dhabi. It carried out additional seismic surveys in Onshore Block 3 last year and will drill further exploration and appraisal wells in 2021-22 on Block 3, expanding drilling to Onshore Block 5 in 2023.

Onshore Block 5 lies adjacent to Block 3 and covers an onshore area of 4,212 square kilometres southeast of Abu Dhabi city.

Oxy will hold a 100 per cent stake in the exploration phase, investing up to $140m, including a participation fee, to explore for and appraise oil and gas potential in the block, which was the first to be awarded by Adnoc in Abu Dhabi’s second licensing round.

Hollub added that the company sees a “significant potential in Onshore Block 5.”

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.