OMV and ADNOC sign a new offshore concession agreement
OMV, the international integrated oil and gas company based in Vienna, signed on April 29 an agreement for the award of a 20% stake in the offshore concession Abu Dhabi – SARB (with the satellite fields Bin Nasher and Al Bateel) and Umm Lulu as well as the associated infrastructure.
The agreed participation fee amounts to USD 1.5 bn and the duration of the contract is 40 years. The concession will be retroactively effective as of March 9, 2018.
“OMV is establishing a material position as an oil producer in the UAE and is delighted to further build on its existing partnership with ADNOC and Abu Dhabi. The offshore concession award is an important milestone in OMV’s delivery on strategy 2025, as we expand our footprint in one of the world’s leading oil and gas hubs. We are confident that our technological expertise will contribute to value creation and profitable growth, for all partners involved,” stated Dr. Rainer Seele, Chairman of the OMV Executive Board and CEO.
According to Johann Pleininger, OMV Board Member Upstream and Deputy Chairman of the Executive Board, the acquisition is a step towards the strategic goal to double group’s reserves. It will substantially increase OMV’s reserve base by approximately 450 million barrels, representing the share over the concession period. OMV’s position in Abu Dhabi is balancing the Upstream production portfolio and increases its long-term cash generation.
“Driven by expansion of the global economy, demand for oil continues to rise and we will work closely with OMV, and our other partners, to optimize the entire offshore value chain, improve operational efficiencies and enhance performance, to ensure that we capture future growth opportunities. OMV’s strong track record in deploying advanced technologies to increase recovery rates from mature fields and produce oil cost effectively will help enable ADNOC to continue to be a reliable supplier of oil for decades to come,” mentioned Dr. Sultan Ahmed Al Jaber, ADNOC Group CEO.
The Satah Al Razboot (SARB) field is located in shallow waters, 120 km away from Abu Dhabi. First oil is expected before the end of 2018. The oil production at plateau rates is expected to be above 20 kbbl/d (net to OMV) and it is anticipated to be reached early in the next decade.
The Umm Lulu field is located offshore, about 30 km away from Abu Dhabi, in shallow waters. The early production started in the fourth quarter of 2016. The oil production plateau is also anticipated to be reached early in the next decade and it is expected to deliver 20 kbbl/d (net to OMV).
OMV’s share of the reserves, for the period of the concession agreement, would amount to approximately 450mn barrels oil for the two main fields, with upside potentials from the satellite fields Bin Nasher and Al Bateel. OMV’s capital expenditures over the contract term are estimated to amount to approximately USD 2bn, thereof approximately USD 150mn will be spent per annum during the first five years.
