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25 February 2024

ExxonMobil sees continuing tie-up with Abu Dhabi

By Reuters

US energy giant ExxonMobil is confident of continuing to be a partner in Abu Dhabi's oil and gas concessions, a top company official said, as the emirate prepares to open a tender for its fields before the deals come up for renewal in 2014.

Oil concessions of the Abu Dhabi Company for Onshore Oil Operations (Adco) will be put to tender following a screening process of the companies interested, including current partners, the director-general of national oil company Adnoc said.

Adnoc's comments on Monday marked a strategy change, opening the floor to increased competition, particularly as Asian companies are keen to take part in Abu Dhabi's oil and gas fields.

Asked on Tuesday whether Exxon sees itself as a frontrunner for the Adco concessions, Morten Mauritzen, president of ExxonMobil companies in Abu Dhabi, sounded confident.

"We believe we have the strengths, the technology, the people and the tools that Abu Dhabi should be looking for, and in that context, yes I see ourselves as a company that can be one of those partners," he told Reuters in an interview on the sidelines the world future energy summit.

Abu Dhabi's concessions lie at the heart of the United Arab Emirates' plan to raise its crude oil production capacity to 3.5 million barrels per day (bpd) by 2017 from the current 2.7 million bpd.

Under the concessions, producers can acquire equity stakes in return for providing investment and accepting profit margins that analysts say are tight by international standards.

Already, Western oil majors such as Shell and Total as well as Exxon hold large stakes in concessions that pump most of the oil and gas of UAE.

But they could face fierce competition from Asian companies as experts point out that Adnoc'S and Abu Dhabi's decisions are very price sensitive.

"Abu Dhabi should and are looking at their options," Mauritzen said. "It will be important to underline the potential for the country by selecting the best partners."

Exxon has two concessions in Abu Dhabi. One is an onshore venture with Adco, due to expire in 2014, and the other an offshore joint venture with Adnoc and JODCO (Japanese Oil Development Co) called the Upper Zakum project.

Current production at Upper Zakum is 600,000 barrels per day, while at the project with Adco the output is 1.4 million bpd, and there are plans to increase it to 1.8 mbpd over the next five to seven years, Mauritzen said.

He expressed Exxon's eagerness to be involved in sour gas projects as well. "Abu Dhabi understands the value ExxonMobil can bring, but it is up to them to decide who they want to partner with," he said.