The country’s largest field has oil reserves estimated at 50 billion barrels and is currently producing 585,000 barrels per day.
Abu Dhabi plans $14bn spending to boost oil output at Upper Zakum
Abu Dhabi plans to spend as much as US$14 billion to boost production at the UAE’s largest oilfield.
Abu Dhabi National Oil Company (Adnoc) made the disclosure yesterday as oil and gas projects worth billions of dollars were announced in the capital.
Adnoc and its partners at the Zakum Development Company (Zadco) plan to boost production by 28 per cent to 750,000 barrels per day at the Upper Zakum field by 2017.
The country’s largest field has oil reserves estimated at 50 billion barrels and is currently producing 585,000 bpd.
“We are also ramping up producing beyond 750,000 to 1 million barrels [per day] by 2024 that is sustainable for 25 years,” said Ali Hassan Al Marzooqi, Zadco’s senior vice president. “Certainly Upper Zakum has upside potential to go even potentially beyond 1 million barrels.”
Adnoc has a 60 per cent stake in Zadco, and the rest is held by ExxonMobil and Japan Oil Development, two partners that will contribute to the investments in the field to reach its target output.
Mr Al Marzooqi was speaking at the Adipec oil conference where a number of big energy projects and contacts were announced yesterday.
Emirates LNG, a joint venture between International Petroleum Investment Company and Mubadala Petroleum, said it would press ahead with the Middle East’s first land-based liquefied natural gas (LNG) regasification facility at Fujairah. The terminal will have an average throughput capacity of 1.2 billion standard cubic feet of natural gas per day, or 9 million tonnes of LNG a year.
National Drilling Company yesterday also struck a deal worth almost Dh1 billion to secure nine new land drilling rigs from China Petroleum Technology & Development Corporation.
Zadco is building four artificial islands to boost production to 750,000 bpd and transfer production from traditional wellhead towers to wells drilled through the islands.
“Instead of working over well head tower wells on steel structures, we will simply secure them for future abandonment and then phase out through the islands,” Mr Al Marzooqi said.
The Upper Zakum plan will help the UAE to reach its target of boosting production capacity to 3.5 million barrels of oil a day by 2017, from under 3 million barrels of oil a day currently.
The concession with ExxonMobil and Japan Oil Development was recently modified to include “improved” fiscal terms for the partners, he said.
“You need to have your partner motivated. They were motivated certainly,” said Mr Marzooqi.
Zadco would continue to use various techniques to boost production from the wells to reach 1 million bpd and might use “enhanced oil recovery” (EOR) techniques in the late 2020s to maintain production from the field.
“With the island we will continue with extended water flooding combined with gas lift and that is for the secondary phase,” said Mr Al Marzqooi.
“We are talking directionally late 2020s starting the EOR selectively in selected reservoirs, but we will optimise the timing. We will define which type of EOR will serve Upper Zakum best because every reservoir has its own specifics.”
The construction of the four islands will amount to $5 billion in short-term capital expenditure savings for Zadco, which is taking advantage of the project’s shallow waters.