Eni Wins Stakes in Two Abu Dhabi Oil Concessions

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By Anthony Dipaola

Eni SpA won a contract with Abu Dhabi National Oil Co. for two offshore oil blocks in the Persian Gulf as the U.A.E. producer awards new concessions to secure markets for its crude.

Adnoc awarded Rome-based Eni a 10 percent stake in the Umm Shaif and Nasr offshore oil fields in return for a payment of $575 million and a 5 percent stake in the Lower Zakum deposit for $300 million, according to separate statements from the two companies. The 40-year contracts started March 9.

In a separate deal, Abu Dhabi’s Mubadala Investment Co. agreed to pay Eni $934 million for a 10 percent stake in the Shorouk concession, which includes the Zohr natural gas field in Egypt, Eni said in another statement. The transaction would give Mubadala, which also secured a stake in the Abu Dhabi oil blocks through a subsidiary, access to the already-producing super-giant gas deposit in the Mediterranean Sea.

Eni is the first Italian company to be given oil or gas concession rights in Abu Dhabi, the largest sheikhdom and the holder of most crude in the United Arab Emirates. Eni is the fourth international company to secure rights to one of Adnoc’s new offshore concessions and the first to sign up for the Umm Shaif and Nasr block. The award adds to Eni’s Middle Eastern operations, which include producing crude in Libya and Iraq, along with natural gas at Egypt’s largest offshore field.

Abu Dhabi plans to raise output capacity to 3.5 million barrels a day by the end of the year, even as the U.A.E. curbs output as part of a global effort to clear a glut. Adnoc says it currently can pump about 3 million barrels daily, with just under half coming from offshore deposits. Abu Dhabi holds about 6 percent of the world’s crude reserves.

Downstream Ambitions

The emirate is seeking partners that can add downstream technology and join projects that will double refining capacity and nearly triple petrochemical output, Adnoc said last week. It plans to offer projects for investment as early as May and will also seek bids for new exploration blocks, the company said.

Abu Dhabi divided up an existing offshore oil partnership into three blocks and is seeking new partners to hold as much as 40 percent of each of the new concessions. The current contract governing those deposits as a single block expired on March 8, with Total SA, BP Plc and Japan’s Inpex Corp. as partners. Adnoc will keep a 60 percent stake in each of the new offshore concessions.

Spanish refiner Cia Espanola de Petroleos SA paid $1.5 billion for a 20 percent stake in the Sateh Al Razboot and Umm Lulu fields in a deal announced Feb. 18. A group of Indian companies paid $600 million for rights to 10 percent of Lower Zakum on Feb. 10, and Japan’s Inpex Corp. bought the same-sized stake later that month.

OMV AG, an Austrian energy company almost 25 percent owned by Abu Dhabi’s Mubadala Investment Co., is also poised to win a stake in the offshore concessions, people with knowledge of the matter said last month.

Neither BP nor Total has signed a new deal for any of the offshore fields. Both companies are partners in Abu Dhabi’s main onshore block.

— With assistance by Salma El Wardany

 

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