Abu Dhabi will put the rights to some of its biggest oilfields out to tender, shaking a partnership with major oil companies that dates to before the Second World War.
The emirate's biggest petroleum concession, a constellation of onshore fields that collectively produce 1.4 million barrels per day (bpd), or half of Abu Dhabi's pumping capacity, is due to expire in two years.
"Adco [Abu Dhabi Company for Onshore Oil Operations] concessions will be put to bidding because companies will be screened," Abdulla Nasser Al Suwaidi, the director general of the Abu Dhabi National Oil Company, said yesterday. His statement was the first clear indication of the Abu Dhabi Government's plans.
Adco is the name of the historic concession due to expire in 2014. Drawn up in 1939 when the emirate was still part of the Trucial States, it includes Total, BP, ExxonMobil, Shell and Portugal's Partex as shareholders.
Putting the concession up for bidding would represent a departure from the emirate's usual method of private negotiations for oil and gas rights.
Last year Abu Dhabi gave out rights to develop fields with up to 1 billion barrels of reserves to South Korea, its partner in its civil nuclear programme, and renewed a package of offshore concessions with Japan, the first nation to buy Abu Dhabi's oil and still one of its largest customers.
The contract to develop challenging natural gas fields at Shah that went to Occidental was announced in a surprise deal this time last year.
"It would be very different from their longstanding policy of doing backroom negotiations," said Robin Mills, the head of consulting at Manaar, based in Dubai.
"Is it a way of putting pressure on the existing partners? Like: 'Sign up to what we're offering, otherwise we'll offer it up to everybody.'"
Executives from the foreign partners in Adco have said the terms of the concession should be amended, including raising the US$1 a barrel payment and splitting up the blocks so companies can deploy proprietary technology without exposing it to rivals.
Choosing the right partners is critical to the emirate's plans to increase production capacity from 2.8 million bpd to 3.5 million bpd.