ADNOC awarded the exploration rights for Abu Dhabi Onshore Block 5, covering 4,212 sq km southeast of Abu Dhabi city, to Occidental. (Source: Image of drilling rig courtesy of ADNOC; Occidental logo by Casimiro PT / Shutterstock.com)
Abu Dhabi National Oil Co. (ADNOC) said on Dec. 9 it awarded an onshore exploration concession to Occidental Petroleum Corp. in the second ever competitive block bid round held by the United Arab Emirates (UAE).
The Houston-based independent E&P company agreed to invest up to 514 million dirhams (US$140 million) including a participation fee, to explore for and appraise oil and gas opportunities. The concession, Abu Dhabi Onshore Block 5, covers an onshore area of 4,212 sq km southeast of Abu Dhabi city.
Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology who also serves as ADNOC Group CEO, said the award strengthens ADNOC’s long-standing partnership with Occidental Petroleum.
In February 2019, Occidental was awarded an onshore block in Abu Dhabi’s first competitive bid round. The company has been an active investor in the Middle East for more than three decades and also has major operations concentrated in south-central Oman.
In a statement commenting on its latest agreement, Vicki Hollub, president and CEO of Occidental, said: “We are honored to partner with ADNOC on a second exploration concession contiguous to Onshore Block 3, where we have completed two exploration wells with extremely promising results. We see significant potential in Onshore Block 5 and, in partnership with ADNOC, will continue to work to help unlock the vast untapped resources in Abu Dhabi.”
Occidental will hold a 100% stake during the exploration phase of Abu Dhabi Onshore Block 5. Following a successful commercial discovery, Occidental will have the right to a production concession. ADNOC has the option to hold a 60% stake in the production phase of the concession. The term of the production phase is 35 years from the commencement of the exploration phase.
In the company release, ADNOC said new 3D seismic data has been acquired over a large part of the Onshore Block 5, which combined with its proximity to the existing onshore oil and gas fields, suggests the concession area has “promising potential.”
In addition to drilling exploration and appraisal wells, Occidental is expected to leverage and contribute financially and technically to ADNOC’s mega seismic survey, which is already acquiring seismic data within the block area.
The 3D seismic survey—the world’s largest—is deploying industry-leading technologies to capture high-resolution 3D images of the complex geology up to 25,000 ft below the surface and will be used to identify potential hydrocarbon reservoirs, according to the release.
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