Abu Dhabi plans $25 billion five-year spending to raise offshore oil production capacity
Abu Dhabi plans to spend more than US$25 billion over the next five years to raise oil production capacity at its offshore fields.
The UAE is planning to boost its total output capacity to 3.5 million barrels per day (bpd) by 2017-18 from about 3 million bpd now.
The country’s production was estimated by the International Energy Agency to be unchanged at 2.84 million bpd in March, although the country itself has officially reported to be producing at rates closer to 3 million bpd for several months.
Production from the Abu Dhabi National Oil Company’s (Adnoc) two biggest offshore units will rise to up to 1.6 million bpd by 2017-18, a 33 per cent increase from about 1.2 million bpd now, said Qasem Al Kayoumi, manager of offshore division, exploration and production directorate at Adnoc.
The Abu Dhabi Marine Operating Company or Adma-Opco, in which Adnoc has a 60 per cent stake, is currently producing about 650,000 bpd. The UK’s BP, France’s Total and Japan Oil Development Co (Jodco) are the other shareholders in the group. The Zakum Development Company or Zadco, in which Adnoc has a 60 per cent stake, is currently producing about 600,000 bpd from the Upper Zakum field, one of the world’s largest.
“You always want to build capacity, but the production rate is always governed by Opec and the government,” said Mr Al Kayoumi at the Middle East Petroleum and Gas conference in Abu Dhabi.
“We have all the confidence that these projects will be delivered on these times and with good quality.”
Adnoc and its partners are planning to boost the capacity of Zadco to 750,000 bpd by 2017-18 and possibly 1 million bpd by 2024, he said.
Adnoc is also planning to boost the capacity of the Lower Zakum offshore field to 425,000 bpd by about 2016, by adding 100,000 bpd. It is also developing other offshore fields such as Umm Lulu, Al Nasr and Satah Al Razboot (Sarb).
Mr Al Kayoumi said Adnoc would “focus on gas development because of the growing demand for gas”.
“We are already working with our current operator companies to do appraisal activities and also we are working with some potential partners through technical evaluation agreements to develop these fields, with a focus on gas development,” he said.
The Adma-Opco concession is due to expire in March 2018 and currently Adnoc is starting preparations for the renewal.
“We are just in the very early phase of planning for this new concession,” said Mr Al Kayoumi. “We are just focusing on appraisal and preparing the documents for tendering. We will go in steps and stages getting the right approval from the SPC [Supreme Petroleum Council].”
The Zadco concession will expire in 2041.
Adnoc is also spending about $2.5bn a year over the next five years on drilling activity, especially gas, as it boosts recovery percentages.
“Our [oil] recovery aspiration is 70 per cent recovery of recoverable reserve and that is very challenging, but you always aim very high when it comes to recovery,” said Mr Al Kayoumi.
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Published: April 21, 2015 04:00 AM