Oil and gas supermajor Eni SpA announced Sunday that it has signed agreements to acquire a stake in two of Abu Dhabi’s offshore producing concessions.
Under the agreements, which are for a duration of 40 years and include a total participation fee of around $875 million, Eni will obtain a five percent stake in the Lower Zakum offshore oil field and a 10 percent stake in the oil, condensate and gas offshore fields of Umm Shaif and Nasr.
Lower Zakum is located about 40 miles off the coast of Abu Dhabi. The discovery dates back to 1963, with production beginning in 1967, and has a target output of 450,000 barrels of oil per day (bopd). Umm Shaif and Nasr are located about 84 miles from the coast of Abu Dhabi and have a target production of 460,000 bopd.
“I'm very pleased about th[ese] agreement[s] 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,” Eni's CEO Claudio Descalzi said in a company statement.
“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,” he added.
Dr Sultan Ahmed Al Jaber, ADNOC group chief executive officer, said the agreements underlined the international market’s confidence in ADNOC’s long term growth plans and the UAE’s stable and reliable investment environment.
ADNOC owns a 60 percent stake in both concessions.
Tom Quinn, Wood Mackenzie’s senior research analyst for Middle East upstream, said Eni’s ADNOC agreements provide ‘low risk, long term barrels’ and lay the foundation for ENI’s Middle East portfolio.
“Eni is very strong in North Africa but has traditionally been under-exposed to the Middle East when compared to its peers,” Quinn said in a statement sent to Rigzone.