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Abu Dhabi widens bids for biggest oil concession

ABU DHABI – U.S. based firms Chevron and Occidental, China’s CNPC, Japan’s Inpex, Korea’s KNOC, Norway' s Statoil and Russia' s Rosneft were among the new companies invited, the people said.

The 75-year-old concession, which expires at the end of the year, produces more than half the United Arab Emirates crude production of 2.6 MMbopd and is one of the few major oil-producing areas in the Persian Gulf where international companies hold a stake.

Without an invitation, the companies would not have an opportunity to be involved in the concession as the emirate does not open the competition to any bidder.

Adnoc holds a 60% controlling stake in Abu Dhabi Co. for Onshore Oil Operations, or Adco, which operates the concession. The remaining 40% is shared between BP, ExxonMobil, Shell, Total and Partex Oil & Gas.

Adnoc has already invited all existing partners except for Partex to reapply for the concession.

In addition, "Adnoc is interested in getting new partners in the concession and therefore they sent invitation letters to several companies back in June," a person close to the matter told Dow Jones Newswires. "More people could be allowed later but it is a good way to see who has the right criteria to bid."

Chevron, Statoil, Rosneft, and CNPC would not say whether they had received the invitations.

KNOC said it has submitted documents for the preliminary qualification review and is waiting to hear back from Adnoc.

An Inpex spokesman would not comment on any specific project but said that the company intends to expand its presence in Abu Dhabi.

Occidental Petroleum did not respond to requests for comment.

Adnoc has already proposed to Abu Dhabi' s highest oil authority, the Supreme Petroleum Council, a one-year extension to the concession, saying the next 10 months aren' t enough time to complete a new deal with international partners. The council is expected to approve the extension soon.

The Adco concession, which covers six main deposits, is the largest in the country with capacity to produce about 1.5 MMbopd. The United Arab Emirates, which includes Abu Dhabi, plans to increase its output capacity to 3.5 MMbopd  by 2017, from its current estimated maximum output capacity of around 2.85 MMbopd.

Abu Dhabi is home to more than 90% of crude in the U.A.E., one of few Middle East countries that allow foreign companies to explore for and produce oil within its borders. The Gulf state has four major concessions and has said it may allow more foreign companies, such as from South Korea and China, to be partners in other, more marginal, oil fields.


Dow Jones Newswires

 

03/08/2013

 

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