Interest in Abu Dhabi National Oil Company’s (ADNOC) first competitive exploration and production licensing round will likely be “substantial”, according to oil and gas analysts at BMI Research.
In a brief research note sent to Rigzone, the analysts said the acreage on offer in the round, comprising four onshore and two offshore blocks, answers to the “investment needs” of the major players in the industry.
“While the global oil sector is in the process of recovery, companies are maintaining a sharp focus on capital discipline,” the analysts said in the research note.
“The level of spending is being kept under tight control, with a continued emphasis on maximizing the efficiency of the spend. The UAE's acreage sits towards the bottom of global cost curve and will be attractive to companies focused on growing their margins as well as their revenues,” the analysts added.
A “range” of companies will likely show interest in the round, according to BMI, including “local players, international majors and some national oil companies (NOCs), in particular those in Asia”.
BMI highlighted that Asian NOCs have been increasing their engagement in the Middle East, particularly in the upstream.
“Many of these companies have to meet large energy requirements domestically and are battling aggressive decline rates on their existing asset base and face a lack of low-cost opportunities for growth at home,” the analysts said.
“Equity stakes in these types of projects in the Middle East offer them a stable share in output and may help allay some of the security of supply concerns as their import dependence rises at home,” the analysts added.
Bids for the round, which was announced by ADNOC on April 10, are due by October.