You are not going to believe thisJuly 1, 2015 9:22
BP not ruled out of Abu Dhabi concessions
BP Plc has not been ruled out of tendering for Abu Dhabi's upcoming renewal of oil and gas concessions, contrary to one media report, industry sources close to the situation said on Monday.
July 10, 2012 11:06 by Reuters
BP Plc has not been ruled out of tendering for Abu Dhabi’s upcoming renewal of oil and gas concessions, contrary to one media report, industry sources close to the situation said on Monday.
A report in Petroleum Intelligence Weekly said last week Abu Dhabi National Oil Co (ADNOC) omitted BP when it sent invitations to existing partners of the Abu Dhabi Company for Onshore Oil Operations (ADCO) concession, to tender for renewals before deals expire in 2014.
Industry sources said on Monday BP was invited to take part but had yet to decide whether it wants to, or under what terms. “All of the existing partners were invited,” an industry source close to the matter said.
BP said talks were continuing. “Constructive discussions are happening at all levels,” a BP spokesman said.
The concessions system in the UAE allows oil and gas producers to acquire equity hydrocarbons from the OPEC member in return for investing in projects.
ADCO is the largest concession with capacity to produce between 1.4 and 1.5 million barrels per day (bpd), and its renewal contract is key to Abu Dhabi’s plans to boost its oil capacity from 2.7 million to 3.5 million bpd.
BP is a partner in ADCO with Royal Dutch Shell, Total, ExxonMobil and Partex Oil and Gas, with ADNOC holding a controlling stake.
Western oil majors have been partners with Abu Dhabi for decades but some big oil companies have expressed their discomfort about the multi-partnered structure of the concessions.
Abu Dhabi’s interest in bringing more partners into the concessions, particularly Asian companies, may be making BP think twice, a second industry source said, especially as the makeup of the new deals is far from clear.
“There is a certain amount of flexibility,” an ADNOC source said. “How the final structure comes out, how many partners there will be – this will all be determined by the tender.”
More partners are being invited and the concessions could accommodate more partners without being broken up into smaller operating companies, sources say.
“If they see things they really like from specific companies in terms of expertise and capabilities they will try and make sure there is room for them to come in,” a source close to the process said.
One recent examples of Asian companies capturing crucial oil blocks is a consortium led by Korea National Oil Corp (KNOC) which finalised a deal in March to take a 40 percent stake in two onshore and one offshore oil drilling areas.
Also earlier this year, ADNOC and China National Petroleum Corp (CNPC) signed an agreement to cooperate in upstream projects, through which the Chinese company has been studying some exploration opportunities in some onshore and offshore blocks.
In June, Austrian energy group OMV signed its first upstream joint venture in Abu Dhabi, agreeing to drill wells for sour gas and condensate with Wintershall, a unit of German group BASF.