ADNOC has announced the signing of an exploration concession agreement awarding the exploration rights for Abu Dhabi’s Offshore Block 5 to a consortium of four Pakistani companies – Pakistan Petroleum (PPL), Mari Petroleum Company (MPCL), Oil and Gas Development Company (OGDCL) and Government Holdings (Private) (GHPL) – in Abu Dhabi’s second competitive block bid round. The consortium is led by PPL.
The award marks the first for Pakistani companies to explore for oil and gas in an Abu Dhabi concession, as well as the first time ADNOC will partner with Pakistani energy companies.
“This historic exploration concession award marks a new chapter of energy cooperation in the 50-year old UAE-Pakistan relationship. It represents an important platform upon which we can drive win-win opportunities to support Pakistan’s energy security and further strengthen the strategic and economic ties between our two countries. We are delighted to partner with Pakistan Petroleum Limited and the other members of the consortium on Offshore Block 5,” said Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of ADNOC.
Under the terms of the agreement, the consortium will hold a 100% stake in the exploration phase, investing up to $304.7 million towards exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an offshore area of 6,223 square km and is located 100 km northeast of Abu Dhabi city.
“The PPL-led consortium is delighted to be selected for the concession award of Abu Dhabi’s Offshore Block 5. This award is not only a watershed moment for Pakistan and the Emirate of Abu Dhabi towards bilateral energy cooperation and economic links but also offers an opportunity to strengthen strategic cooperation with ADNOC to share technical know-how and expertise,” said Moin Raza Khan, Managing Director and CEO of PPL. “We are particularly excited that this consortium comprises the ‘big four’ national exploration and production companies that are fully geared to support ADNOC and the Emirate of Abu Dhabi in reinforcing its leading position in the global energy sector.”
Following a successful commercial discovery during the exploration phase, the consortium will have the right to a production concession to develop and produce such commercial discoveries. 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 and the block offers the potential to create significant in-country value for the UAE over the lifetime of the concession.
In addition to drilling exploration and appraisal wells, the exploration phase will see the consortium leverage and contribute financially and technically to ADNOC’s mega seismic survey, which is acquiring 3D seismic data within the block area. The data already acquired over a large part of the block combined with its proximity to existing oil and gas fields, suggests the concession area has promising potential.
ADNOC launched Abu Dhabi’s second competitive block bid round in 2019, offering a set of major onshore and offshore blocks, on behalf of the Government of Abu Dhabi. The award of Offshore Block 5 to the Pakistani consortium concludes this second block bid round.