Consortium awarded exploration rights for Abu Dhabi’s Block 5

2 min read
This is the second natural gas discovery made by ADNOC.
  • The consortium will hold a 100 percent stake in the exploration phase.
  • ADNOC has the option to hold 60 percent stake in production phase of the concession.

ABU DHABI: The Abu Dhabi National Oil Company (ADNOC) on Tuesday awarded exploration rights for Abu Dhabi’s Offshore Block 5 to a consortium of four Pakistani companies in the emirate’s second competitive block bid round.

The consortium is led by Pakistan Petroleum Limited (PPL), Mari Petroleum Company Limited (MPCL), Oil and Gas Development Company Limited (OGDCL), and Government Holdings (Private) Limited (GHPL).

Under the terms of the agreement, the consortium will hold a 100 percent stake in the exploration phase, investing up to $304.7 million (AED1.12 billion) towards exploration and appraisal drilling, including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an offshore area of 6,223 square kilometers and is located 100 kilometers north east of Abu Dhabi city.

ADNOC has the option to hold a 60 percent 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.

The award marks the first time Pakistani companies invest in and explore for oil and gas in an Abu Dhabi concession as well as the first time ADNOC partners with Pakistani energy companies, ADNOC said.

The agreement builds on the deep-rooted bilateral relationship between the UAE and Pakistan and underscores ADNOC’s expanded approach to strategic partnerships, including those who can provide access to key growth markets for the company’s crude oil and products.

Sultan bin Ahmed Al Jaber, Group CEO of ADNOC, who signed the agreement with CEO of PPL Moin Raza Khan, 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.”

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.

In addition to drilling exploration and appraisal wells, the exploration phase will see the consortium leverage and contribute financially and technically to ADNOC’s mega seismic survey, which is acquiring 3D seismic data within the block area. The data already acquired over a large part of the block combined with its proximity to existing oil and gas fields, suggests the concession area has promising potential, ADNOC said.