Oil major BP has signed an agreement with the Supreme Petroleum Council of the Emirate of Abu Dhabi and the Abu Dhabi National Oil Company (ADNOC) to receive 10% interest in Abu Dhabi’s Adco onshore oil concession for 40 years.
The agreement was signed by BP Group chief executive Bob Dudley and ADNOC Group CEO Dr Sultan Ahmed Al Jaber.
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Under this agreement, BP also becomes a 10% shareholder in Adco (Abu Dhabi Company for Onshore Petroleum Operations Limited) that operates the concession. It also becomes the asset leader for Bab asset group within the concession.
With regard to the transaction, BP has agreed to issue new ordinary shares representing around 2% of BP’s issued share capital (excluding treasury shares), to be held on behalf of the Government of Abu Dhabi.
The issuance of the new ordinary shares is subject to some listing requirements and is expected to be completed shortly.
Dudley said: "Today's agreement marks a new phase in BP’s long relationship with Abu Dhabi and, in particular, ADNOC.
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By GlobalData"BP will work closely with ADNOC to realise the full potential of these world-class resources and I welcome Abu Dhabi as an important investor in BP.
“This agreement will provide BP with long-term access to significant and competitive resources that we already understand very well. We will bring our people, cutting-edge technology and experience of managing mature giant fields around the world to help maximise recovery from these assets.”
In Adco, Total, Inpex and Gs Energy already owns 10%, 5% and 3% interests, respectively.
Dr Al Jaber said: “BP has long been a strategic partner to Abu Dhabi and ADNOC. Alongside our other partners, BP has played an important role in the development of our oil and gas assets.
"This agreement marks a milestone in our efforts to forge new partnership models that bring technology, expertise and financing aimed at maximising the value of our resources and supporting the transfer of knowledge.
“We look forward to working with value-add partners that share a mutual interest in advancing the industry and applying innovative technology that improves operational efficiency and recovery.”
The Adco concession comprises the Bab, Bu Hasa, Shah and Asab fields that hold nearly 20 to 30 billion barrels of oil equivalent throughout the term of the concession.
This year, the concession's overall production is expected to be around 1.66 million barrels of oil per day.
To support the Adco consession interest and asset leadership of Bab assets, BP intends to send its technical staff to enhance technology, expertise and assist the ongoing operations.
