Petronas and ADNOC sign unconventional oil deal

Malaysia’s Petronas signed an agreement with Abu Dhabi National Oil Company (ADNOC) to explore and appraise unconventional onshore block 1 covering a 2,000 square km concession area in the Al Dhafra region in the UAE.

Petronas will hold 100 per cent equity and operatorship to explore and appraise unconventional oil in the concession area for a period up to six years. Following a successful appraisal phase, the partners can enter a production concession which ADNOC has the option to hold a 50 per cent stake in.

The agreement was signed by Petronas President and Group Chief Executive Officer, Datuk Tengku Muhammad Taufik and UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of ADNOC, His Excellency Dr. Sultan Ahmed Al Jaber, and witnessed by His Majesty Seri Paduka Baginda the Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah Ibni Almarhum Sultan Haji Ahmad Shah Al-Musta’in Billah and UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan. Also present was the Minister of International Trade and Industry, YB Senator Tengku Datuk Seri Utama Zafrul bin Tengku Abdul Aziz.

Datuk Tengku Muhammad Taufik stated: “I am very pleased to note that the United Arab Emirates and Malaysia’s long and fruitful bilateral ties have progressed to a partnership between Petronas and ADNOC. Petronas is honoured to have this opportunity to explore and appraise unconventional energy with a progressive and forward-looking partner such as ADNOC.

“This partnership bears strong testament to our deep unconventional expertise in Canada and Argentina which we developed over the last decade, and we look forward to bringing this experience to the world-class resources in Abu Dhabi. It will also see Petronas widen its global unconventional energy footprint to include the United Arab Emirates in its existing portfolio,” he added.

H.E Dr. Al Jaber added: “We are delighted to partner with Petronas on this historic unconventional oil concession. This award ushers a new chapter of strategic energy cooperation in the longstanding relationship between the UAE and Malaysia, and it reinforces the UAE’s position as a trusted investment destination."

“As one of the least carbon intensive oil and gas producers, ADNOC will continue to responsibly unlock value from Abu Dhabi’s vast hydrocarbon resources in a reliable and sustainable manner, to drive local economic growth and support global energy security, in line with the wise directives of the UAE’s leadership. As such, we have driven the de-risking of Abu Dhabi’s unconventional oil resources and look forward to building on this with Petronas to realise the full potential of Unconventional Onshore Block 1.”