State-owned RAK Gas is reviewing interests from potential investors in its licensing round, particularly Indian oil companies which have made inroads in the regional energy sector.
The company, which operates in the Northern Emirates, launched a licensing round in April, offering seismic data rooms in Ras Al Khaimah and London.
"We've had Indian companies show interest but we've had interest from lots of geographies as well. So we are very pleased," said Nishant Dighe, chief executive of RAK Gas.
The UAE, which accounts for 4.2 per cent of global oil production, has three ongoing licensing rounds this year, as higher oil prices revive investor interest in upstream assets.
State-owned Abu Dhabi National Oil Company launched its first licensing round in May, offering six blocks to international investors, while Sharjah National Oil Company has also offered concessions this year.
Indian companies have snapped up a number of deals in the UAE's energy sector as Asia's third biggest economy seeks closer ties with oil producers in the Middle East.
In February, Adnoc awarded Indian company Larsen & Toubro a contract worth more than Dh1.25bn to develop a small onshore field. Adnoc also awarded a 10 per cent interest in its Lower Zakum offshore concession to a consortium of Indian companies in a Dh2.2bn deal.
RAK, which is home to large industrial companies, including the energy-intensive ceramics sector, requires additional gas supplies to meet growing commercial demand.
RAK Gas, which is likely to close the bid round by end of the year, is offering exploration and production sharing agreement contracts to potential investors, said Mr Dighe.
“[This is] quite unique in the region, but a framework that many oil companies are comfortable with,” he said.
The company operates a gas plant, which is expected to off-take much of the potential gas finds by investors, while condensate could be available for export. Condensate is a light oil that fetches a higher price than normal crude because it is easier to refine into products.
“Any liquids that are produced here, whether that’s oil production coming to our gas plants, condensate that might be associated with gas production, we would process and store in our gas processing facility," said Mr Dighe. "And we have storage and facilities for unloading the crude or condensate into tankers, which will ship internationally."
RAK Gas has a processing plant with a 150 million cubic feet per day capacity at Khor Khwair that produces gas, liquefied petroleum gas and condensate.
In an interview with The National, Total UAE president Hatem Nusseibeh said the French oil major was studying all three ongoing bid rounds in the country, as it looked to snap up lower-cost barrels in the Middle East.
The launch of simultaneous rounds at a time when oil prices are above $70 per barrel after a three-year lull is helpful for investors, said Robin Mills, chief executive at consultancy Qamar Energy.
"The three bid rounds have been launched on their own initiative. Except that of course oil prices are higher and that means more investment and chance of a successful round,” he said. "And production in Ras Al Khaimah and Sharjah has been declining for years and they need some new gas for local needs."
RAK, which had earlier relied on the Saleh field, has been searching for alternatives following its closure last year. The field, which lies 48km offshore RAK, has been on the decline due to pressure depletion and water breakthrough, and had been producing inconsistently since 1996.