Sharjah National Oil Company joins Adnoc and RasGas in launching licensing rounds this year
Sharjah launches oil and gas licensing round as it looks to plug gas deficit
Sharjah has launched a licensing round for three oil and gas blocks in the emirate, as it looks to develop more gas to meet growing power demand and plug shortages.
Sharjah National Oil Corporation will retain 25 per cent interest in concessions A and C, and a 50 per cent stake in Concession B, which is an unappraised deep gas discovery below the Sajaa gas-condensate field, the company said on its website.
"The intended concessional arrangements will facilitate the efficient and speedy development and monetisation of any commercial discovery, whereby the National Oil Corporation is set to purchase and process the hydrocarbons through its existing gas processing and transmission facilities, where applicable," said Ahmed Bin Sultan Al Qasimi, chairman of the emirate's petroleum council, which greenlighted the bid round.
The bids will close on 18 November, with selected bidders announced shortly after and contracts effective from 1 January 2019, it added.
Sharjah's licensing round follows recent announcements by state-owned Abu Dhabi National Oil Company for its first-ever licensing round this year, and another by Ras Al Khaimah's RasGas to chiefly explore for gas in the emirate to feed industry.
The interest in upstream exploration for oil and gas comes amid increasing oil prices in the first half of the year, which has encouraged the return of investment to the industry following the three-year collapse in prices. The UAE has a five-year plan to spend $109bn on the energy industry, with the fund among other things, to be allocated to developing downstream assets at home or acquiring and developing them abroad, if necessary. The country, which accounts for 3.1 per cent of global gas reserves will also look to prioritise development of this resource, particularly its sour gas reserves.
SNOC said there was a good potential for recovery from the yet unappraised fields on offer, citing the presence of over five trillion cubic feet of total proven reserves from existing fields in Sharjah, with around 90 per cent gas recovery.
The explored reservoirs had high well productivity, with average first-year rates exceeding 40 million cubic feet per day per well, it added.
Companies interested in working on the Sharjah fields will have access to existing field infrastructure, gas and condensate as well as export facilities developed by SNOC, which would translate into lower capital investment, and earlier cash flows, it added.
The quest for more gas is crucial to Sharjah's economy, which experienced power outages over the last decade due to shortage of the fuel.
In order to plug its gas deficit, SNOC has considered deploying a floating storage and regasification unit, which will supply imported liquefied natural gas to northern emirates in 2019.