Dubai — Abu Dhabi awarded a second slice of its offshore oil concessions in as many weeks, this time to Spanish refiner and producer Cia Espanola de Petroleos for a $1.5bn fee.
Government-owned Abu Dhabi National Oil awarded Madrid-based Cepsa a 20% stake in development rights for the Sateh Al Razboot and Umm Lulu fields in the Persian Gulf, Adnoc said on Sunday. Abu Dhabi’s Mubadala Investment owns Cepsa.
The 40-year contract is the second that Adnoc has signed for its offshore deposits this month. Adnoc secured a $600m deal with a group of Indian companies for the Lower Zakum field on February 10. It plans to award holdings of 40% in each of three offshore blocks that it is putting up for tender, as the partnership governing those deposits as a single, unified concession will expire on March 8.
"The agreement reflects Adnoc’s new partnership approach, as we expand and diversify our partner base," CEO Sultan Al Jaber said in the statement.
Abu Dhabi holds about 6% of global crude reserves and produces most of the oil in the United Arab Emirates. While the UAE is curbing output in an effort by two dozen nations to clear a global glut, Abu Dhabi plans to raise output capacity to 3.5-million barrels a day by the end of the year. Adnoc says it can pump about 3-million barrels daily with just under half of it coming from offshore deposits.
Abu Dhabi is seeking to attract international partners that can contribute technology, financing or access to markets where oil demand is growing. Neither Cepsa nor the Indian companies that won a 10% stake at the Lower Zakum concession were partners in the emirate’s main producing fields.
Cepsa signed an agreement in November to work with Adnoc on a petrochemical plant and has an indirect holding in three smaller offshore deposits. India is the second-biggest buyer of UAE crude behind Japan, according to Bloomberg tanker-tracking data.
The oil block where Cepsa will operate also contains the smaller Bin Nasher and Al Bateel fields, Adnoc said. Targeted production for the block is 215,000 barrels a day, Adnoc said earlier this month, without specifying a date.
Adnoc will retain a 60% stake in each of the three blocks for which it’s seeking partners. The company has said it was in talks with more than 10 potential partners for the fields. The company is completing agreements for all three concessions, it said on Sunday, without saying when it would announce additional deals.