The International Petroleum Investment Company is planning a major investment in Abu Dhabi's oil and gas infrastructure in partnership with the Abu Dhabi National Oil Company (Adnoc), a senior Ipic official said yesterday. The official, who spoke on condition of anonymity, declined to specify the production fields targeted by the investment.
The move would be a first for the US$14 billion (Dh51bn) Abu Dhabi Government energy fund, which had left domestic investment in oil production to Adnoc and focused instead on building downstream infrastructure across the country and purchasing energy assets abroad. Yesterday's news came a week after an official at a major German oil company said his firm would partner with Ipic to explore for oil and gas in Abu Dhabi.
Bernhard Schmidt, a member of the board of BASF Wintershall, told Dow Jones that the company would begin working with Ipic on operations within the emirate as soon as next year, although it was unclear whether he was referring to the same deal as the Ipic partnership with Adnoc. "We're in the process of evaluating first opportunities, with a focus on Abu Dhabi," Mr Schmidt said. "When we enter a region, we enter to establish it as a core region."
Ipic officials declined to comment on the Dow Jones report. The company signed an agreement with Wintershall in June to develop oil and gas projects across the region. Mr Schmidt said Wintershall, which has focused on oil and gas assets in Russia and the Caspian region, wanted to gain access to reserves in Abu Dhabi, which have been restricted to a small group of international oil companies for decades. A concession granted in 1939 to a consortium of companies for onshore production is due to expire in 2014. A second concession for offshore reserves will expire in 2018.
Investment in Abu Dhabi's oil and gas production is just one more big-ticket expenditure for Ipic, which has purchased assets across the Middle East and Europe. In April the company acquired a two per cent stake in Energia de Portugal, the Portuguese utility, and in June it announced it would build three oil refineries in Pakistan and Morocco. Ipic is building a pipeline that will eventually transport 1.5 million barrels per day of crude oil to a port in Fujairah, bypassing the Strait of Hormuz. The company is also investing in a major chemicals complex at Taweelah and a refinery in Fujairah.
Last month, the company said it would create a $1bn fund in partnership with the government of Kazakhstan to invest in oil and gas projects in Central Asia.