(MENAFN- Khaleej Times)
The Abu Dhabi National Oil Company (Adnoc) on Tuesday said it signed a deal with a consortium of four Pakistani companies to explore oil and gas in Abu Dhabi's Offshore Block 5.
In a statement, the Abu Dhabi-based energy giant said consortium of Pakistani companies comprising of Pakistan petroleum Limited (PPL), Mari Petroleum Company Limited (MPCL), Oil and Gas Development Company Limited (OGDCL), and government Holdings (Private) Limited (GHPL).
It is first time Pakistani companies will invest in and explore for oil and gas in an Abu Dhabi concession. Adnoc also partners with Pakistani energy companies for the first time, reflecting the deep-rooted bilateral ties between the UAE and Pakistan.
Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of Adnoc, and Moin Raza Khan, managing director and CEO of PPL, signed the exploration concession agreement.
Under the deal, Pakistani companies will invest Dh1.12 billion ($304.7 million) during the exploration phase in Abu Dhabi concession that covers an offshore area of 6,223 square kilometers and is located 100 kilometres north east of the city.
New chapter of cooperation
Dr Al Jaber said this historic exploration concession award marks a new chapter of energy cooperation in the 50-year old UAE-Pakistan relationship.
“It represents an important platform upon which we can drive win-win opportunities to support Pakistan's energy security and further strengthen the strategic and economic ties between our two countries. We are delighted to partner with Pakistan Petroleum Limited and the other members of the consortium on Offshore Block 5.
“The consortium was selected as part of Abu Dhabi's block bid round where we have once again reinforced our approach to strategic partnerships that contribute the right combination of market access, capital, best-in-class expertise or advanced technology,” the minister said.
“We are very optimistic about the potential to unlock significant value with all our partners in this second competitive block bid round as we continue to accelerate the exploration and development of Abu Dhabi's untapped resources, in line with the Leadership's wise directives,” he said.
Golden opportunity
Raza Khan said the PPL-led consortium is delighted to be selected for the concession award of Abu Dhabi's Offshore Block-5.
“This award is not only a watershed moment for Pakistan and the Emirate of Abu Dhabi towards bilateral energy cooperation and economic links but also offers an opportunity to strengthen strategic cooperation with Adnoc to share technical know-how and expertise.
“We are particularly excited that this consortium comprises the 'big four' national exploration and production companies that are fully geared to support Adnoc and the Emirate of Abu Dhabi in reinforcing its leading position in the global energy sector,” Khan said.
Following a successful commercial discovery during the exploration phase, the consortium will have the right to a production concession to develop and produce such commercial discoveries.
Adnoc has the option to hold a 60 per cent stake in the production phase of the concession. The term of the production phase is 35 years from the commencement of the exploration phase and the block offers the potential to create significant in-country value for the UAE over the lifetime of the concession.
New life to Pak energy firms
Samiullah Tariq, head of research at Pakistan Kuwait Investment Company, said this is a strategic partnership deal and will benefit the Pakistani energy sector.
“I think it is a very strategic and important deal as it will not only improve bilateral ties between the UAE and Pakistan, but it would also enhance the learning and knowledge of Pakistani companies,” Triq told Khaleej Times.
PPL operates 15 producing fields across Pakistan and contributes over 20 per cent of the country's total natural gas supplies. As of June 2020, PPL's proven recoverable reserves were 1,793.5 billion cubic feet of natural gas, 13.3 million barrels of oil/ NGL/ condensate and 543.1 thousand tonnes of LPG.
Muzammil Aslam, chief executive of Tangent Capital Advisors, said Pakistan energy companies settling into Abu Dhabi offshore drilling will give life to depressed exploration and production companies.
"This will be at very crucial stage when Pakistan is rapidly becoming energy starving country led by depleting energy resources and higher economic growth," Aslam told Khaleej Times.
Moreover, he said the opportunity will also create synergies for Pakistan energy companies through deploying their excess cash and growth opportunities. "Importantly, working with Adnoc will help Pakistan exploration companies develop offshore drilling expertise, which has vast potential in Pakistan also," he said.
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Muzaffar Rizvi Business Editor/News Editor of Khaleej Times is a well-connected journalist and an economic and financial commentator. He has been in the mainstream journalism since 1997, covering the UAE's economy and key sectors. He holds a post-graduate degree in Economics and has won many awards for authentic and insightful reports on global and regional businesses and economic trends.
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