Thursday, September 28, 2023
Oil & Gas

Petronas signs historic unconventional deal in Abu Dhabi

Petronas has signed a concession for the first unconventional oil concession in the Middle East, during a high-level visit.

Petronas will explore the Unconventional Onshore Block 1, Emirati news agency WAM reported, with a 100% stake. The company signed up with Adnoc for the work.

The Malaysian company has signed up to six years of work on the 2,000 square km block, in the Al Dhafra region. Should it be successful, it can shift into a production concession that runs for 30 years. Adnoc has an option to take a 50% stake.

Petronas will also provide unspecified financial contributions to Adnoc’s ongoing 3D mega seismic survey. BGP is acquiring this data and it has already shot seismic in the area.

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Adnoc head Sultan Ahmed Al Jaber signed the deal with Petronas president and CEO Datuk Tengku Muhammad Taufik. United Arab Emirates President Sheikh Khaled Mohamed bin Zayed Al Nahyan and the Malaysian King the Yang di-Pertuan Agong witnessed the agreement.

New chapter

Al Jaber said the deal with Petronas was historic. “This award ushers a new chapter of strategic energy co-operation in the long-standing relationship between the UAE and Malaysia, and it reinforces the UAE’s position as a trusted investment destination,” he said.

Developing Abu Dhabi’s unconventional resources is increasingly important for the state. Adnoc has driven “de-risking” in this area, the executive said, and it looks forward to “building on this with Petronas to realise the full potential of Unconventional Onshore Block 1”.

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Petronas’ Taufik said the company was honoured to explore and appraise unconventional opportunities with Adnoc.

“This partnership bears strong testament to deep unconventional expertise in Canada and Argentina, which we developed over the last decade, and we look forward to bringing this experience to the world-class resources in Abu Dhabi. It will also see Petronas widen its global unconventional energy footprint to include the United Arab Emirates in its existing portfolio,” he said.

Abu Dhabi claims to have 22 billion barrels of crude in its unconventional resources. WAM said these had a “production potential comparable to the most prolific North American unconventional plays”.

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Petronas is working in Argentina on such unconventional plays, recently talking about the possibility of building an LNG export facility. The Malaysian company also has a 25% stake in LNG Canada, which aims to begin exporting gas into Asia. This project aims to start up in 2025.

Petronas feeds the LNG Canada venture from a major position in the Montney shale. With its joint venture partners, the group claims around 52 trillion cubic feet of gas.

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