Eni buys stake in Abu Dhabi offshore oil and gas fields in UAE for $875m

Eni has signed a couple of concession agreements to acquire a stake of 5% and 10% in the Lower Zakum offshore oil field and the Umm Shaif and Nasr oil, condensate and gas offshore fields, respectively in offshore Abu Dhabi for a price of around $875 million.

The stakes bought from ADNOC are for duration of 40 years and have been bought by the Italian oil and gas company to get access to the rich hydrocarbons reserves in UAE.

The three offshore Abu Dhabi fields involved in the transaction have been in production.

Lower Zakum is located nearly 65 kilometers from the Abu Dhabi coast and was discovered in 1963 while production commenced in 1967. This Abu Dhabi offshore oil field has a target production of 450,000 barrels of oil per day.

On the other hand, the Umm Shaif and Nasr offshore oil and gas fields are located nearly 135 kilometers from the Abu Dhabi coast and have a target production of 460,000 barrels of oil per day.

Dr. Sultan Ahmed Al Jaber (front R), ADNOC Group CEO, and Claudio Descalzi (front L), CEO of Eni, sign historic agreements awarding Eni stakes in two of Abu Dhabi’s offshore concessions, witnessed by H.H. Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces (back center R), and H.E. Paolo Gentiloni, Prime Minister of Italy (back center L). (PRNewsfoto/Abu Dhabi National Oil Company)

Claudio Descalzi – CEO of Eni, said: “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 Sultan Ahmed Al Jaber – CEO of ADNOC Group said the agreements signed with Eni showcase the global market’s confidence in the long-term growth plans of ADNOC’s and the stable and reliable investment environment in UAE.

He also said that the transactions will widen and diversify ADNOC’s partnership base, while providing experience, capital, technology and market access.

The ADNOC CEO, further said: “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.

“With these agreements ADNOC continues to leverage its 46-year legacy of successful energy partnerships, in support of its 2030 strategy.”

In both the Abu Dhabi offshore concessions, ADNOC holds a stake of 60% stake and is an operator as well through its subsidiary ADNOC Offshore.

Eni with its 5% stake has now joined the ONGC Videsh led Indian consortium (10%) and Japan’s Inpex (10%) along with ADNOC as stakeholders in the Lower Zakum offshore oil field.