US-based oil and gas exploration and production (E&P) company Occidental has secured exploration rights for Abu Dhabi Onshore Block 5 in the UAE following a competitive bidding round.
The company signed the exploration concession agreement with the Abu Dhabi National Oil Company (ADNOC) to appraise oil and gas opportunities in the block located southeast of Abu Dhabi city.
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The contract was approved by Abu Dhabi’s Supreme Petroleum Council (SPC).
As agreed, Occidental will hold 100% stake during the exploration phase and will invest up to AED514m ($140m) for exploration activities on the block that covers an onshore area of 4,212km².
The company will also have the right to a production concession following a successful commercial discovery and can hold a 60% stake in the property during the production phase.
In a statement, ADNOC said that a new 3D seismic data covering a large part of the block as well as its proximity to existing onshore oil and gas fields, suggest that the area has promising potential.
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By GlobalDataThe production phase will have a 35 year term starting from the commencement of exploration activities.
The UAE Minister of Industry and Advanced Technology and ADNOC Group CEO Dr Sultan Ahmed Al Jaber said: “We are very pleased to once again collaborate with Occidental and strengthen our long-standing partnership. This concession award highlights the important role of energy cooperation in deepening the strong and deep-rooted strategic relationship between the UAE and the US.
“Crucially, the award underscores the attractiveness of Abu Dhabi’s huge untapped resource potential and ADNOC’s ability to continue to secure foreign direct investment to the UAE’s stable and trusted business environment, despite tough market conditions.”
Last month, ADNOC awarded the world’s largest 3D seismic shoot to CNPC-subsidiary BGP.
