The Abu Dhabi National Oil Company (ADNOC) has signed an agreement with French oil and gas major Total, granting it a 40% stake in the Ruwais Diyab Unconventional Gas Concession. Under the terms of the agreement, Total will explore, appraise and develop the concession area’s unconventional gas resources.
ADNOC Group, for which the award is an important milestone to reach the target of one billion cubic feet per day (bcfd) of unconventional gas production before 2030, retains a 60% stake in the concession.
The agreement includes a six to seven-year exploration and appraisal phase which will then be followed by a 40-year production term. It was signed in ADNOC’s Thamama Subsurface Collaboration Center, by Dr. Sultan Ahmed Al Jaber, ADNOC Group Chief Executive Officer, and Patrick Pouyanné, CEO and Chairman of Total. The historic unconventionals concession award is the first of its kind in the region.
This agreement is a result of close cooperation between ADNOC and Total towards identifying ways of unlocking the unconventional gas potential in Abu Dhabi, Total bringing its expertise, personnel and technical know-how.
“Total is ADNOC’s largest and one of its longest international partners, having been active in Abu Dhabi’s oil and gas sector since 1939. This concession agreement marks an important and historic milestone in the development of Abu Dhabi’s gas resources, as we deliver our strategic commitment to ensure a sustainable and economical gas supply, in line with the directives of the UAE’s leadership,” Dr. Al Jaber said.
“Total and ADNOC have agreed on commercial terms that will enable the project to deliver maximum value from our unconventional gas reserves as we work towards achieving gas self-sufficiency, for the UAE, and transition to having the capacity to become a net gas exporter. We have received significant interest from other potential partners wanting to join other unconventional oil and gas concession areas that we are considering. Discussions are progressing with these multiple interested parties, and we will make further announcements in due course. As ADNOC embarks on the exploration and development of Abu Dhabi’s unconventional gas resources, it will undergo an accelerated learning curve which will help drive efficiencies in drilling and hydraulic fracturing, and allow us to create higher value from what is a more challenging resource compared to the giant conventional oil and gas fields of Abu Dhabi,” Dr. Al Jaber added.
Today, Total collaborates with ADNOC across the full value chain, from offshore and onshore exploration, development and production, to processing, products and shipping. In March the French super-major was awarded a 20% interest in the offshore Umm Shaif and Nasr concession and a 5% interest in the Lower Zakum concession.
“We are pleased to be the first international company to pioneer unconventional gas exploration in Abu Dhabi alongside ADNOC. This agreement consolidates our longstanding and strategic relationship in a country and region that we know well. We are committed to supporting the UAE in meeting its ambitions to unlock this significant unconventional gas resource. The Diyab play has the potential to be a high impact play ranking alongside the most prolific North American shale gas plays and is an excellent addition to our exploration portfolio,” Pouyanné mentioned.
The announcement follows the Supreme Petroleum Council’s approval of ADNOC’s new integrated gas strategy, that will enable the UAE to become gas self-sufficient with the potential to become a net gas exporter. In addition to developing the Ruwais Diyab Unconventional Gas Concession, ADNOC will unlock and maximize value from its Hail, Ghasha and Dalma mega sour gas project and Abu Dhabi’s gas caps, as well as new natural gas accumulations which will continue to be appraised and developed as the company pursues its exploration activities.
Total in the United Arab Emirates
Total has been present in the United Arab Emirates for almost 80 years and has built a strong presence, reflected by the size and diversity of its assets and partnerships. In 2017, the Group’s equity production in Abu Dhabi was 290,000 boe/d.
In partnership with ADNOC, Total holds:
- 20% in the Umm Shaif & Nasr and 5% in the Lower Zakum 40-year concessions (former ADMA);
- 10% in the 40-year ADNOC Onshore concession (former ADCO);
- 15% in ADNOC Gas Processing (former GASCO);
- 5% in ADNOC LNG (former ADGAS);
- 24.5% in Dolphin Energy Ltd.
In addition, Total owns 100% stake and operates the Abu Al Bukoosh field.
In the power production sector, Total is also a partner in the Shams project, the world’s largest concentrated solar power plant in operation (100 MW), inaugurated in 2013, and since 2001 in the Taweelah water desalination and power plant, which produces around 20% of Abu Dhabi’s water and power consumption.
The Group also has a leading position in the manufacturing and marketing of a wide range of automotive and industrial lubricants with a blending plant in the UAE, supplying the whole region.
Total is the world’s fourth largest global oil and gas company. Its businesses cover the entire oil and gas value chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and international crude oil and product trading. It is active in unconventional oil and gas projects around the world, from research to exploration and production. Recognized within the industry for its pioneering role in the development of unconventional resources, Total has considerable historic expertise in production methods such as horizontal drilling and hydraulic fracturing.
Total operates in all the main oil and gas production regions, from Asia to Africa, Russia, the Middle East, the United States and the North Sea. Its portfolio includes the start-up of 14 major projects and the launch of more than ten new developments all over the world in 2017 and 2018.