BP has taken a 10 per cent stake in Abu Dhabi’s main onshore oilfield concession after a prolonged negotiation, agreeing to pay about US$2.2 billion for the stake through the issue of new shares.
As part of the deal, BP will become the manager of the Bab oilfield, one of the six main oilfields in the Abu Dhabi Company for Onshore Oil Operations (Adco) concession.
In an unusual move, BP has agreed to pay for its stake through the issue of new ordinary shares representing about 2 per cent of its issued share capital, to be held on behalf of the Abu Dhabi Government.
Sultan Al Jaber, the chief executive of Abu Dhabi National Oil Company (Adnoc) and Minister of State, said: “This agreement marks a milestone in our efforts to forge new partnership models that bring technology, expertise and financing aimed at maximising the value of our resources and supporting the transfer of knowledge.”
BP was one of the shareholders in the original Adco concession that expired two years ago, but had baulked at the high price tag set on the new 40-year concession when France’s Total agreed at the start of last year to pay about $2.2bn for its 10 per cent stake.
“BP will work closely with Adnoc to realise the full potential of these world-class resources, and I welcome Abu Dhabi as an important investor in BP,” said Bob Dudley, the oil major’s chief executive, who was in Abu Dhabi to sign the deal with Mr Al Jaber.
“This agreement will provide BP with long-term access to significant and competitive resources that we already understand very well,” Mr Dudley said. “We will bring our people, cutting-edge technology and experience of managing mature giant fields around the world to help maximise recovery from these assets.”
One of the key considerations for Abu Dhabi’s Supreme Petroleum Council, which ultimately decides on the concession holders, was the pitches that potential Adco stakeholders made about how they would use their technologies and experience to enhance the oil recovery rates for the Adco oilfields.
Typically, oilfield recovery rates have been at about 40 per cent of their estimated reserves, but Abu Dhabi leaders have wanted to push that substantially higher, to rates of as much as 70 per cent, which would represent billions of dollars of extra revenue over the lives of the fields.
But the immediate sticking point for shareholders had been the price tag of the Adco shareholding, especially in the lower oil price environment of the past two years, as well as the relatively low payment terms per barrel for the concession holders.
Inpex of Japan and GS Energy of South Korea (with the financial backing of the Korea National Oil Corporation), have also taken stakes of 5 per cent and 3 per cent, respectively. Neither will be field operators, although Japan and South Korea are Abu Dhabi’s two largest and longest-standing customers for crude oil exports.
Adnoc holds 60 per cent of Adco and said in a statement that it continues to negotiate with other potential stakeholders for the remaining 12 per cent on offer.
BP will take over operatorship of Bab from Total, which had stepped in on an interim basis to move along the field’s development, according to the Total chief executive, Patrick Pouyanne.
As part of its concession deal, Total operates the South East and Bu Hasa oilfields, which together cover about two-thirds of Adco’s output, which is currently at a rate of about 1.66 million barrels per day (bpd), or slightly more than half of Abu Dhabi’s 3.1 million bpd output.
Neither BP nor Adnoc would disclose the specific compensation terms of the deal, but BP’s chief financial officer, Brian Gilvary, said via a statement: “We have worked closely with Adnoc to structure an agreement that is attractive and strategic for both parties … the lower cost characteristics of this already producing conventional onshore oil development will be accretive to earnings and cash flow, while providing BP with another building block of long-term growth.”
Industry estimates have put the compensation at less than $2 per barrel for the concession stakeholders, but statements by Total executives and others suggest that there are incentives built into the deal for exceeded targets on the oilfield developments, plus the potential to increase terms by trading the crude oil they receive.
BP said that it will be sending about 50 of its staff to work at Bab.
BP also holds a 14.67 per cent interest in Adma-Opco, one of Abu Dhabi’s two main offshore concessions, plus 10 per cent of both the Abu Dhabi Gas Liquefaction Company (Adgas) and the National Gas Shipping Company (Ngsco).
BP said its net share of oil and gas production from Abu Dhabi is expected to rise from about 95,000 bpd to approximately 260,000 bpd next year, compared with the company’s total daily output last year of about 2 million bpd.
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COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
The biog
Full name: Aisha Abdulqader Saeed
Age: 34
Emirate: Dubai
Favourite quote: "No one has ever become poor by giving"
UEFA CHAMPIONS LEAGUE FIXTURES
All kick-off times 10.45pm UAE (+4 GMT) unless stated
Tuesday
Sevilla v Maribor
Spartak Moscow v Liverpool
Manchester City v Shakhtar Donetsk
Napoli v Feyenoord
Besiktas v RB Leipzig
Monaco v Porto
Apoel Nicosia v Tottenham Hotspur
Borussia Dortmund v Real Madrid
Wednesday
Basel v Benfica
CSKA Moscow Manchester United
Paris Saint-Germain v Bayern Munich
Anderlecht v Celtic
Qarabag v Roma (8pm)
Atletico Madrid v Chelsea
Juventus v Olympiakos
Sporting Lisbon v Barcelona
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Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others
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Engine: 1.5-litre turbo
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Torque: 230Nm
Transmission: 6-speed automatic
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Engine: 2.9-litre twin-turbo V6
Power: 540hp at 6,500rpm
Torque: 600Nm at 2,500rpm
Transmission: Eight-speed auto
Kerb weight: 1580kg
Price: From Dh750k
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"What is left is a skeleton of the virus so it looks like a virus, but it is not live."
This is then injected into the body.
"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.
"You have to be exposed more than one time to what we call the antigen."
The vaccine should offer protection for at least months, but no one knows how long beyond that.
Dr Al Kaabi said early vaccine volunteers in China were given shots last spring and still have antibodies today.
“Since it is inactivated, it will not last forever," she said.
Scotland v Ireland:
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Replacements: Fraser Brown, Jamie Bhatti, D'arcy Rae, Ben Toolis, Rob Harley, Ali Price, Pete Horne, Blair Kinghorn
Coach: Gregor Townsend (SCO)
Ireland (15-1): Rob Kearney; Keith Earls, Chris Farrell, Bundee Aki, Jacob Stockdale; Jonathan Sexton, Conor Murray; Jack Conan, Sean O'Brien, Peter O'Mahony; James Ryan, Quinn Roux; Tadhg Furlong, Rory Best (capt), Cian Healy
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Coach: Joe Schmidt (NZL)
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Like motto: You always get what you ask for, the universe listens.
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Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
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Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government
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Transmission: Single-speed automatic
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Final
UAE v Hong Kong
Live on OSN Cricket HD. Coverage starts at 5.30am
Company profile
Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
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Man of the match
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Dubai College A 50-12 Dubai College B
THE SCORES
Ireland 125 all out
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UAE 125 for 5
(17 overs, Mustafa 39, D’Silva 29, Usman 29)
UAE won by five wickets
Asia Cup Qualifier
Final
UAE v Hong Kong
TV:
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The Secret Kingdom
Director: Matt Drummond
Stars: Alyla Browne, Alice Parkinson, Sam Everingham
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Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
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