OMV has signed a deal to help explore and develop some of Abu Dhabi’s prospective offshore oil and gas fields.
The Vienna-based oil company that is 25 per cent owned by the Abu Dhabi energy investment vehicle Ipic said it had arranged a four-year seismic, drilling and engineering work programme to explore and appraise oil and gasfields in the North-West Offshore Abu Dhabi area that includes the Ghasha and Hail blocks.
The company said it had won the contract from Abu Dhabi National Oil Company (Adnoc) to work in conjunction with Occidental Petroleum, which this time last year was awarded an evaluation contract for the same areas.
Adnoc said at the time that it and Occidental would spend up to US$500 million to run 3D seismic surveys, drilling appraisal wells and engineering studies by 2017 to evaluate the area’s prospects.
There was no mention by any of the parties last year or in yesterday’s statement about how expenditure would be split, but Saoud Mubarak Al Mehairbi, Adnoc’s exploration manager, had said: “Oxy will provide manpower support in form of ‘secondees’ … and will organise a number of training courses to provide human resources development opportunities.”
Similarly, OMV’s statement yesterday said: “OMV and Occidental will also contribute with seconded personnel and technical expertise for the evaluation activities.”
OMV’s chief executive, Rainer Seele, said: “This cooperation will further strengthen our already excellent partnership with Adnoc,” which includes the appraisal of the sour gas Shuwaihat field.
The exploration and production side of the industry has been severely hit by the oil price crash in the past 18 months, but the OMV spokesman Robert Lechner said the Abu Dhabi opportunity was too good to pass up.
“Even in a low oil price environment it makes sense for OMV to further develop assets in strategically important regions such as the UAE,” he said.
Occidental’s $10 billion Al Hosn sour gas project produced its first gas last year, and its outgoing chief, Stephen Chazen, estimated last year that its share of the project would generate between $7.5bn and $12bn in cash over its 25-year life.
Nevertheless, he has consistently said the company would be open to selling some or all of its stake, and the company has long-standing plans to reduce exposure to the Middle East in general.
OMV has struggled with stagnant production and only recently stabilised its earnings.
Previous geological evaluations have associated the Hair Dalmah and Ghasha structures with natural gas rather than oil prospectivity.
amcauley@thenational.aeFollow The National's Business section on Twitter
