Eni enters ADNOC’s two offshore concessions

Italy’s Eni has signed two concession agreements for the acquisition of stakes in two of Abu Dhabi’s offshore concession areas for a total participation fee of about $875 million and a duration of 40 years. 

Under the terms of the agreements, Eni has been awarded a 10% interest in the Umm Shaif and Nasr concession and a 5% interest in the Lower Zakum concession.

The awards mark the first time an Italian energy company has been given concession rights in Abu Dhabi’s oil and gas sector.

Eni contributed a participation fee of AED 2.1 billion ($575 million) to enter the Umm Shaif and Nasr concession and a fee of AED 1.1 billion ($300 million) to enter the Lower Zakum concession. Both concessions will be operated by ADNOC Offshore, a subsidiary of ADNOC, on behalf of all concession partners. In both concessions, ADNOC owns a 60% stake.

Lower Zakum is located about 65 kilometers off the coast of Abu Dhabi. The discovery dates back to 1963 and production began in 1967. It has a target production of 450,000 barrels of oil per day. Umm Shaif and Nasr are located about 135 kilometers from the coast of Abu Dhabi and have a target production of 460,000 barrels of oil per day.

The agreements were signed by Dr. Sultan Ahmed Al Jaber, ADNOC Group Chief Executive Officer, and Claudio Descalzi, CEO of Eni.

Descalzi commented: “I’m very pleased about this agreement creating a larger presence for Eni in Middle East, in line with our expansion strategy, and creating a strong alliance with ADNOC and Abu Dhabi. The stakes in the two concessions give access to giant fields with huge potential and Eni is willing to contribute its best technology to maximize the future production.”

Dr. Al Jaber said: “These agreements underline the international market’s confidence in ADNOC’s long-term growth plans and the UAE’s stable and reliable investment environment. They also broaden and diversify our partnership base, in line with the leadership’s directives, while contributing experience, technology, capital and market access.

“Our partnership with Eni, and other concession partners, will enable us to accelerate our growth, increase revenue and improve integration across the upstream value chain, as part of our ongoing transformation and build on the foundations that have been laid to deliver a more profitable upstream business.”

The Umm Shaif and Nasr, and Lower Zakum concessions, along with the SARB and Umm Lulu concession areas, have been created from the former ADMA offshore concession, with the aim of maximizing commercial value, broadening the partner base, expanding technical expertise, and enabling greater market access.

Eni joins an Indian consortium, led by ONGC Videsh, and Japan’s Inpex as stakeholders in the Lower Zakum concession.

ADNOC is also finalizing opportunities, with potential partners, for the remaining 15% of the available 40% stake in the Lower Zakum concession, and for the remaining 30% stake in the Umm Shaif and Nasr concession.