ExxonMobil, ADNOC talk further collaboration in upstream

Dr. Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of the Abu Dhabi National Oil Company (ADNOC), and Darren W. Woods, Chairman and CEO of ExxonMobil, have met to explore new opportunities for collaboration in the upstream and downstream sectors, and discuss wider regional and business-related developments of mutual interest. 

Source: ADNOC

The discussions coincided with a joint visit to review the progress of the over $30 billion (AED 110 billion) expansion taking Upper Zakum to a production capacity of 750 thousand barrels per day (mbpd) and 1 million barrels per day (mmbpd) respectively, with the latter planned for 2024.

ADNOC is leveraging mutually beneficial partnerships to drive new commercial opportunities and expand its portfolio across the upstream and downstream sectors.

Dr. Al Jaber said: “Our partnership with ExxonMobil going back 80 years reflects the strong, deep-rooted and long-standing economic and political ties between the UAE and the US. At ADNOC, we continue to place great importance on our strategic partnerships with the US energy sector, which has contributed to further enhancing the economic relations between our two countries.”

He added: “We are keen to strengthen this strategic partnership across the entire value chain, as we accelerate delivery of our 2030 smart growth strategy.”

During the visit, Dr. Al Jaber and Woods inspected key facilities at Al Ghallan Island which is under development for future production as part of the ongoing project, known as UZ750, to increase the production capacity of the Upper Zakum field to 750 mbpd.

Woods said: “We have shared many successes in the UAE together over the past 80 years, most notably with ADNOC in the Upper Zakum joint venture, and we look forward to building on this strong foundation. The joint success between ADNOC and ExxonMobil on Upper Zakum is a testament to what is possible when national and international energy companies work together.”


Four new artificial islands for UZ750 project


The UZ750 project is estimated to see an investment of around $21.8 billion (AED 80 billion) and comprises four new artificial islands, to accommodate drilling rigs, processing facilities and infrastructure required to handle production capacity growth to 750 mbpd, effectively creating an onshore environment offshore.

Dr. Al Jaber and Woods discussed the new substantial conventional and unconventional oil and gas exploration opportunities in Abu Dhabi, following ADNOC’s announcement, last week, to offer five major offshore and onshore blocks for competitive bidding.

The CEOs also discussed downstream investments, including gas and liquefied natural gas (LNG) opportunities.

The visit follows the award, in April, by ADNOC and its joint venture partners, ExxonMobil Abu Dhabi Offshore Petroleum Company Limited and INPEX Corporation, of a Front-End Engineering Design (FEED) contract to increase the production capacity of the Upper Zakum oilfield to 1 mmbpd by 2024.

The 1 mmbpd expansion project, which is an integral component of ADNOC’s plan to increase its oil production capacity to 4 mmbpd by 2020 and 5 mmbpd by 2030, is estimated to cost approximately $8 billion (AED 29.4 billion), including drilling-related expenditure. It will capture synergies from the existing UZ750 project, optimizing costs and maximizing value for ADNOC and its partners.

The Upper Zakum Development utilizes extended reach drilling to optimize well numbers and enable maximum reservoir contact. In recent years, the development saw one of the world’s longest wells at 35,800 feet measured depth.

The Upper Zakum oilfield, located offshore Abu Dhabi, is the second-largest offshore oilfield and the fourth-largest oilfield in the world.

The Upper Zakum Development is also enabling synergies with the Lower Zakum Concession through shared multi-well pad drilling and streamlined rig utilization that are enhancing efficiencies and optimizing costs. In addition, and to gain further efficiencies, new extended reach drilling activity for the Lower Zakum Concession is expected to start later this year from Upper Zakum’s Al Ghallan Island.

According to ADNOC, artificial islands provide significant cost and environmental benefits, particularly in shallow water, by enabling the use of lower-cost land-drilling rigs instead of high-cost offshore jack-up drilling rigs.

As a result of ADNOC’s experience in utilizing artificial islands, it has also adopted this approach in the development of the Ghasha Concession where 10 artificial islands are being constructed for the Hail, Ghasha and Dalma offshore sour gas mega project.

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