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Abu Dhabi, UAEMonday 23 July 2018

Adnoc's Yasat awards offshore contract to Abu Dhabi's NPCC

The Bu Haseer field operated by Al Yasat Petroleum will see output capacity raised to 16,000 bpd by 2020

Adnoc's offshore Bu Haseer oilfield. Saudi Arabia and the UAE on Tuesday said they are prepared to address global oil market imbalances if necessary. Photo Courtesy: Adnoc
Adnoc's offshore Bu Haseer oilfield. Saudi Arabia and the UAE on Tuesday said they are prepared to address global oil market imbalances if necessary. Photo Courtesy: Adnoc

Abu Dhabi National Oil Company awarded local firm National Petroleum Construction Company, a contract to double the production capacity of its offshore Bu Haseer field by 2020, the firm said on Monday.

Adnoc subsidiary Al Yasat Company for Petroleum Operations, which manages the Bu Haseer field, awarded the engineering, procurement and construction contract to Abu Dhabi-based NPCC to raise the output of the offshore asset from 8,000 barrels per day (bpd) to 16,000 bpd over the next two years.

“Bu Haseer, which forms part of two exploration blocks awarded to CNPC [China National Petroleum Corporation] in 2013, demonstrates the substantial exploration and production potential of Abu Dhabi’s subsurface and the commercial opportunities to maximise value from our upstream resources,” Adnoc upstream director, Abdulmunim Al Kindy said in a statement.

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The UAE accounts for around 4.5 per cent of the global crude output, according to the latest BP Statistical Review of World Energy, with much of the production coming from Adnoc-owned entities. The company has plans to increase its total production capacity to 3.5 million bpd this year. Adnoc awarded around $8bn worth of concession stakes, earlier this year, to energy majors from Europe as well as oil companies from China, India and Japan to boost offshore oil and gas production.

Al Yasat is majority owned by Adnoc, with 40 per cent interest held by China's state-owned CNPC. The company, in addition to Bu Haseer, operates another offshore block which consists of a number of fields under appraisal and development, including, Belbazem, Umm Al Dholou, and Umm Al Salsal. Al Yasat estimates around 1.5 billion barrels of oil in place in the entire offshore block, which is located to the southwest of Abu Dhabi.

The award to NPCC, which is partially-owned by Abu Dhabi's industrial holding company Senaat, is part of Adnoc's efforts to increase in-country value, it said in the statement, without revealing the value of the deal.

Last month, the first batch of crude from Bu Haseer, a 50,000 bpd shipment, loaded by CNPC, left for China.

Chinese state-backed firms have become one of the largest foreign investors in Abu Dhabi's energy sector, as Adnoc renewed its efforts to engage the biggest consumers of its crude to become co-investors across its value chain.

In May, Tayba Al Hashemi, Al Yasat's acting chief executive, told an audience in Beijing that the company had received significant interest in the ongoing Adnoc licensing round from Chinese firms.

Adnoc has offered four onshore and two offshore blocks spanning 30,000 square kilometres to international oil and gas companies as part of its first-ever competitive bidding round.

In March, CNPC picked up two stakes worth Dh4.3bn in offshore fields from Adnoc’s erstwhile Adma-Opco concessions, with the Abu Dhabi firm retaining a 60 per cent interest.

PetroChina, which is majority-owned by CNPC, was awarded a 10 per cent interest both in Umm Shaif and Nasr as well as the Lower Zakum offshore concessions. PetroChina, China’s biggest oil producer with concessions in Iraq, paid a participating fee of Dh2.1bn to enter Umm Shaif and Nasr and Dh2.2bn for offshore Lower Zakum, Adnoc said at the time.