Eni and PTTEP Awarded Third Block Offshore UAE
The two oil companies will spend more than $400 million to find targets in the expansive offshore area that is currently the subject of the world’s largest 3D survey.
The Abu Dhabi National Oil Company (ADNOC) announced today that it has awarded an offshore exploration concession to Italy’s Eni and Thailand’s PTT Exploration and Production (PTTEP).
Eni will operate Offshore Block 3 during the exploration phase and, along with its partner PTTEP, will be required to spend at least $412 million locating potential targets and drilling appraisal wells. The figure also includes a participation fee.
“This award follows the one achieved by the same consortium in 2019 for offshore exploration Blocks 1 and 2 and represents a further important step towards the realization of Eni’s strategy to become a leading actor in the development and production in Abu Dhabi, Claudio Descalzi, CEO of Eni, said in the announcement.
He added that, “Offshore Block 3 represents a challenging opportunity that can unlock significant value thanks to exploration and appraisal of shallow and deep reservoirs.”
Located northwest of Abu Dhabi, Offshore Block 3 covers an offshore area of about 11,660 km2 (~4,500 sq mi) that has been partially surveyed with 3D seismic. ADNOC said because the southern edge of the block borders existing onshore oil and gas fields that it “has promising potential.”
Upon making a commercial discovery, production rights will be granted for up to 35 years. ADNOC holds rights to claim a 60% stake in the production phase of the concession.
“Despite volatile market conditions, we are making very good progress in delivering Abu Dhabi’s second competitive block bid round, underscoring our world-class resource potential and the UAE’s stable and reliable investment environment,” Sultan Al Jaber, CEO of ADNOC Group, said in the statement.
Part of Eni’s and PTTEP’s financial commitment will help fund ADNOC’s “mega seismic survey” that is already underway in the block area.
“This world’s largest 3D seismic survey is deploying industry-leading technologies to capture high-resolution 3D images of the complex geology at ultra-deep locations below the surface and will be used to identify potential hydrocarbon reservoirs,” said ADNOC in its announcement of the award.
Eni and PTTEP won their first two offshore concessions from ADNOC during its first competitive bid round in January 2019. The two companies are in the middle of exploring for potential targets in these concessions, known as Offshore Block 1 and Offshore Block 2.
Earlier this month, ADNOC awarded an onshore concession to Occidental Petroleum covering an area of more than 4,200 km2 (~1625 sq mi).