Abu Dhabi National Oil Company (ADNOC) and Petronas Abu Dhabi have agreed to explore an unconventional onshore block in Abu Dhabi.

Under the deal, the two firms will explore and appraise Unconventional Onshore Block 1 in Abu Dhabi’s Al Dhafra region.

For a period of up to six years, Petronas will retain a 100% stake and operating rights to explore and appraise resources in the unconventional oil the block, which covers a 2,000km² concession.

UAE Minister of Industry and Advanced Technology and ADNOC managing director and group CEO Dr Sultan Ahmed Al Jaber said: “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 realise the full potential of Unconventional Onshore Block 1.”

Upon the completion of the appraisal phase, the firms will consider signing a production concession deal, whereby ADNOC will have the option to hold a 50% stake in the concession.

Datuk Tengku Muhammad Taufik said: “This partnership bears strong testament to our 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.”

As per the estimates, Abu Dhabi holds unconventional recoverable very light and sweet crude oil resources of 22 billion barrels, according to WAM.