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40-YEAR AGREEMENT

Dr Sultan Ahmed Al Jaber (R) and Dr Rainer Seele

Adnoc awards OMV 5pc stake in Ghasha gas concession

ABU DHABI, December 20, 2018

The Abu Dhabi government and the Abu Dhabi National Oil Company (Adnoc) have awarded Austria’s OMV a five percent stake in the Ghasha ultra-sour gas concession that comprises the Hail, Ghasha, Dalma, Nasr, Sarb and Mubarraz sour gas fields.

The Abu Dhabi government and the Abu Dhabi National Oil Company (Adnoc) have awarded Austria’s OMV a five percent stake in the Ghasha ultra-sour gas concession that comprises the Hail, Ghasha, Dalma, Nasr, Sarb and Mubarraz sour gas fields.

OMV, which joins Italy’s Eni and Germany’s Wintershall as Adnoc’s partners in the concession, will contribute 5 percent of the project capital and operational development expenses. Eni was awarded a 25 percent stake and Wintershall a 10 percent stake in the Ghasha concession in November.

The concession agreement, which has a term of 40 years, was signed by Dr Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc Group CEO, and Dr Rainer Seele, chairman of the executive board and CEO of OMV.

Dr Al Jaber said: “This long-term strategic agreement with OMV, as well as the other Ghasha concession agreements we have concluded recently, underscores Adnoc’s commitment to maximizing value from Abu Dhabi’s substantial gas resources and to ensuring a sustainable and economic supply of gas, in line with the leadership’s directives.

“The combination of rising demand for gas, more advanced technology and our industry-leading experience in developing sour gas fields, makes it possible for us to commercially and holistically unlock value from our vast sour gas resources.

“This agreement builds on, and extends, our strong partnership with OMV, who we collaborate with in key areas across the oil and gas value chain. They bring extensive experience in sour gas operations, in Austria and Pakistan, and, like Adnoc, have a proven record working with mature and complex reservoirs. It will help ensure our investment, in the Ghasha concession, will maximize long-term returns for the benefit of ourselves, our partners and the nation.”

The Ghasha concession awards follow Abu Dhabi’s Supreme Petroleum Council’s approval of Adnoc’s integrated gas strategy, which will see the development, in phases, of Abu Dhabi’s substantial gas reserves, as the UAE moves towards gas self-sufficiency and aims to transition from a net importer of gas to a net gas exporter.

The project is expected to produce over 1.5 billion cubic feet of gas per day when it comes on stream around the middle of the next decade, enough to provide electricity to more than two million homes. Once complete, the project will also produce over 120,000 barrels of oil and high-value condensates per day.

Over the project’s lifetime, Adnoc expects substantial benefits to flow back into the UAE economy under its In-Country Value program, which is intended to stimulate commercial opportunities for local businesses, catalyze socio-economic development and create additional employment opportunities for UAE nationals.

Dr Seele said: “We are pleased to be awarded a stake in the largest sour gas and condensate fields in Abu Dhabi and to strengthen our partnership with Adnoc. We are confident that our technological expertise will contribute to value-creation and profitable growth, for all partners involved. Today’s signature marks a long-term commitment, and it is another important step in the successful implementation of our strategy 2025. With this agreement, we are expanding our already material position in the Middle East and are further shifting our upstream production towards gas.”

Sour gas is defined by its significant hydrogen sulfide content; in the past this has made processing the natural gas more complex. This is the reason why the resource has lain beneath the surface in some fields for decades after its initial discovery. However, the combination of rising demand and technological advances has now made extraction and processing viable.

In developing the Hail, Ghasha, Dalma and other ultra-sour gas fields in the concession, Adnoc will capitalize on its world-leading expertise and successes in ultra-sour gas development, gained from the development of the Shah reservoir, creating an ultra-sour gas centre of excellence for the region.

In addition to developing the Ghasha concession area, Adnoc also plans to increase production from its Shah sour gas field to 1.5 billion cu ft per day and move forward to develop the sour gas fields at Bab and Bu Hasa. Adnoc also plans to tap gas from its gas caps and unconventional gas reserves, as well as new natural gas accumulations, which will continue to be appraised and developed as the company pursues its exploration activities.

OMV, which has a long-standing experience in the treatment of sour gas, collaborates with Adnoc in a number of areas. In April, it was awarded a 20 percent stake in Abu Dhabi’s Sarb and Umm Lulu offshore concession. Since 2016, it has also been leading on a four-year seismic, drilling and engineering work program to explore and appraise areas that include the fields in the Ghasha concession.

OMV is also a shareholder in Borealis, Adnoc’s partner in Borouge, a leading global provider of innovative plastic solutions, and, in May 2017, Adnoc and OMV agreed to work together to explore potential opportunities in support of Adnoc’s downstream growth ambitions. – TradeArabia News Service
 




Tags: Adnoc | Stake | OMV |

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