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29 March 2024

Asian, western firms bid for UAE oilfields

Published
By Reuters

Asian and western firms have bid to help operate the UAE's biggest oilfields after a deal with oil majors expired this year but the Gulf Arab state is yet to decide whether to let Asian oil buyers in for the long haul, sources said.

A final decision on the winning firms is unlikely before early 2015, industry and diplomatic sources said.

At least one oil major, ExxonMobil, appears to have decided against bidding, the sources told Reuters.

ExxonMobil, Royal Dutch Shell, Total and BP - have each held 9.5 percent equity stakes in the Abu Dhabi Company for Onshore Oil Operations (Adco) concession since the 1970s. Portugal's Partex had a 2 percent stake, and the rest was held by state run Abu Dhabi National Oil Company (Adnoc).

After the deal expired in January, Adnoc took 100 per cent of the concession. Shell, Total and BP have made their new bids, which are being evaluated by Abu Dhabi, the sources said.

Exxon, however, did not bid for the Adco concession after it renegotiated a better deal for the Upper Zakum offshore oilfield, which it has been operating with Adnoc and Japan's Inpex since 2006, two sources said.

The US major pulled out its staff from the Adco fields earlier this year, a sign that it has dropped out of the race, sources say.

"Exxon has pulled its folks out while others kept their people. (It is) 95-percent (sure) Exxon has decided not to bid," one source told Reuters.

"They are going to make what? $2 or $3 dollars a barrel? So they probably said: 'Why have two projects in the UAE?'," the source said.

Exxon said its Adco concession expired on Jan.10 but declined to comment about its staff and future plans.

Exxon's exit may improve the chances for the other three former partners and pave the way for newcomers to join in.

US firm Occidental Petroleum Corp, Italy's ENI , China National Petroleum Corp. (CNPC), Norway's Statoil, Japan's Inpex and Korea National Oil Corp have bid for the new deal, three sources told Reuters.

Rosneft has been invited to bid, but it was not clear whether Russia's top oil company has submitted an offer, two industry sources said.

"Abu Dhabi's new partners are expected to be selected in early 2015. The evaluation process is underway," one industry source said.

The onshore fields produce 1.6 million barrels per day (bpd), over half UAE's oil output.

The UAE oil minister said in January Abu Dhabi has received strong interest from international firms to participate in the Adco fields with revised terms.

Adnoc did not respond to Reuters emails and calls for comment. A CNPC official said the Chinese company has bid to operate the Adco fields, but he knew no further details.

None of the remaining companies vying to be part of the next phase of development would comment on the situation.