Photo: ADNOC, Eni, and PTTEP CEOs; Source: ADNOC

Eni to operate one of Abu Dhabi’s largest offshore exploration concessions

Italian oil and gas company Eni has signed a concession agreement for the acquisition of a 70 per cent stake in the Exploration Offshore Block 3, leading a consortium including a wholly-owned subsidiary of Thailand’s PTTEP with the remaining 30 per cent stake.

Exploration Offshore Block 3 map - Eni
Exploration Offshore Block 3 map; Source: Eni

Offshore Block 3, located in the north-west offshore of the Abu Dhabi Emirate, is the largest area to be awarded among those blocks that were offered for commercial bidding by ADNOC in May 2019 as part of Abu Dhabi’s second competitive block licensing round, Eni explained on Monday.

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Under the terms of the agreements, Eni will operate the concession to explore for oil and gas and appraise the existing discoveries in the block, which covers an area of approximately 11,660 square kilometres.

The exploration phase of the agreement has a maximum period of up to nine years and, subject to successful exploration, an overall concession term will extend to 35 years from the beginning of the exploration phase for development and production phases in which ADNOC has the option to hold a 60 per cent stake.

New 3D seismic data has already been acquired for a part of the block, which is in close proximity to existing large oil and gas producing and under development fields, in part participated by Eni, and that is estimated to have a promising potential.

According to Eni, the near-field nature of the exploration targets will allow exploiting the synergies with the nearby existing infrastructure.

The exploration concession agreement was signed by Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO; Claudio Descalzi, CEO of Eni; and Phongsthorn Thavisin, CEO of PTTEP.

Dr. Al Jaber said: “This concession award reinforces ADNOC and Eni’s growing partnership across our value chain and deepens our relationship with Thailand’s PTTEP, one of the key markets for our crude oil and products. This again validates our targeted approach to value-add partnerships that contribute the right combination of capital, technology, capabilities and market access to accelerate the development of Abu Dhabi’s hydrocarbon resources.

“Despite volatile market conditions, we are making very good progress in delivering Abu Dhabi’s second competitive block bid round, underscoring our world-class resource potential and the UAE’s stable and reliable investment environment”.

Claudio Descalzi, Eni CEO, said: “This award follows the one achieved by the same consortium in 2019 for offshore exploration Blocks 1 and 2 and represents a further important step towards the realisation of Eni’s strategy to become a leading actor in the development and production in Abu Dhabi, a leading region for the oil and gas industry, while contributing through its expertise in exploration to add further resources and exploit all potential synergies with the surrounding fields.

“It also further strengthens our relationship with our valuable partner PTTEP. Offshore Block 3 represents a challenging opportunity that can unlock significant value thanks to exploration and appraisal of shallow and deep reservoirs”.

Source: ADNOC

Phongsthorn Thavisin, PTTEP CEO, said: “The consortium will bring capabilities, experiences and technology to accelerate the development of Offshore Block 3, as well as Offshore Blocks 1 and 2, and lead to a successful discovery.

“The strategic partnership has been established to jointly contribute to the petroleum development in the UAE and be part of the growing industry. Such an approach aims to sustainably increase both petroleum reserves and production in the future”.

Eni has been present in Abu Dhabi since 2018 with a 10 per cent stake in the Umm Shaif and Nasr Offshore concession plus a 5 per cent stake in the Lower Zakum concession as well as 25 per cent stake in Ghasha concession that is approaching final FID.

Current equity production is around 50,000 bbl/day, in line with the current quotas agreed by OPEC+ members.

In 2019 Eni was awarded in the first Abu Dhabi competitive bid round two offshore exploration concessions, Offshore Blocks 1 and 2.

Eni is also a shareholder with a 20 per cent equity interest in ADNOC Refining. Eni in the UAE is also present in the Emirate of Sharjah and Ras Al Khaimah.