OVL, partners acquire 10% stake in Abu Dhabi oilfield for 600 millionby Opinion Express February 12, 2018 0 comments
FIRST TIME ANY INDIAN COMPANY HAS SET FOOT IN THE OIL RICH UAE
“It money bhai” – Modinomics has redefined the bilateral relationship between UAE and India by sheer focus on economic diplomacy. ONGC Videsh Ltd and its partners have acquired a 10 per cent stake in a large offshore oilfield in Abu Dhabi for $600 million, the first time any Indian company has set foot in the oil rich UAE.
The contract for the oilfield in Lower Zakum Concession, as part of India’s efforts to ensure the country’s energy security, was signed in Abu Dhabi in the presence of Prime Minister Narendra Modi and Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed al-Nahyan. While addressing a large gathering of the Indian community in Dubai on 11 Feb 2018 , Modi referred to the major deal and said it was the “beginning of a bright dimension in our partnership”
OVL, the overseas arm of state- owned Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and a unit of Bharat Petroleum Corp Ltd (BPCL), paid a signing amount of$600 million for a 10 per cent stake in Abu Dhabi National Oil Co’s (ADNOC) 40 year Lower Zaku m Concession, Offshore Abu Dhabi.
“The current production of this field is about 400,000 barrels of oil per day (20 million tonnes per annum) and Indian consortium’s annual share shall be about 2 million tonnes” the OVL said in a press statement. “This is the first Indian investment in upstream oil sector of tile United Arab Emirates, transforming tile traditional buyer-seller relationship to along-term investor relationship;’ a statement issued by the Indian embassy here said. The field is to achieve plateau target of 450,000 barrels of oil per day by 2025.
The concession, which has a term of 40 years with an effective date of March 9,2018, was signed by ONGC Group Chairman Shashi Shanker and ADNOC Group Chief Executive Sultan Ahmed Al Jaber. WNOC is finalising potential partners for the remaining 30 per cent of the available 40 per cent stake in tile Lower Zakurn Concession ear marked for international oil and gas companies,’ tile statement said.
The deal “will help India meet its growing demand for energy and refined products, create opportunities for ADNOC to increase its market share in a key growth market, and build a solid foundation as ADNOC explores potential international investments, particularly focused on downstream opportunities;’ Sultan al-Jaber said.
Shanker hoped that the historic agreement will lead to further opportunities for Indian oil and gas companies to participate in the UAE’s energy sector. “The agreement reflects the vision of the Prime Minister of India towards strengthening hydrocarbon linkages with the UAE on a win-win basis;’ he said. ADNOC chief executive said the pact supports company’s strategy to maximise economic value and recovery from its offshore oil and gas resources. “This is an attractive and strategic agreement for both parties that will deliver competitive returns and long term growth opportunities”
ADNOC had ill August last year said that it would split its ADMA- OPCO offshore concession into three areas Lower Zakum, Umrn Shaif and Nasr and Sateh Al Razboot and Umm Lulu – with new terms to bring greater value and increase opportunities for partnerships.
“The present transaction marks entry of OVL ill highly prospective UAE region and is consistent with its stated strategic objective of adding high quality producing assets to its existing oil and gas exploration and production portfolio;’ the statement said.
OVL is India’s largest international oil and gas company, having 39 projects in 18 countries, including Azerbaijan, Bangladesh, Brazil, Colombia, Kazakhstan, Mozambique, Myanmar, Russia, South Sudan, Sudan, Namibia, Venezuela, Vietnam and New Zealand.
It currently produces about 277,000 barrels of oil and oil equivalent gas per day and has total oil and gas reserves (2P) of about 704 million tonnes of oil equivalent as on April 1, 2017. ADNOC have 60 per cent stake in existing ADMA-OPCO concession, which produces around 700,000 barrels per day of oil and is projected to reach about 1 million barrels per day 2021.
Indian government is planning a massive oil reserve deport near Bangalore in South India to meet its strategic energy requirement in emergency situations. The present deal with UAE is a part of the larger strategy to meet 21 days of emergency energy requirement of domestic market in case of any national or international crisis.
Courtesy: The Pioneer