x Abu Dhabi, UAEFriday 28 July 2017

Wintershall aims to 'build a bigger position in the Middle East quickly'

The German oil company is eying further opportunities in Abu Dhabi and the wider region.

Wintershall, the latest international oil company to become active in Abu Dhabi's hydrocarbon sector, is eying further opportunities in the emirate and the wider region.

The only German oil and gas producer of note signed a deal in June to appraise a gas and condensate field near Shuwaihat alongside its Austrian partner OMV.

"We definitely want to do more projects in Abu Dhabi," said Rainer Seele, the chief executive of Wintershall. "We want to build up a bigger position in the Middle East relatively quickly."

The company's agreement with the Abu Dhabi National Oil Company (Adnoc) stipulates that the European partners appraise the field, a process that assesses the commercial viability of the project.

Production at the field is made difficult by the composition of the natural gas, which is heavily laced with sulphur, while the amount of condensate - a lucrative mix of oil and gas - determines the profitability of exploiting the reservoir.

"The amount of condensate in the field is very important," said Mr Seele.

If production at the field is viable, Adnoc will join Wintershall and OMV as majority partner in a consortium exploiting the concession.

Mr Seele hopes that the Shuwaihat field will allow his company to showcase its ability.

"We are an operator at Shuwaihat. That way, we can bring in our technical know-how. We want to profile the technical competence of Wintershall," he said.

Wintershall is a subsidiary of the German chemicals giant BASF, and Mr Seele believes that his country's reputation for engineering excellence will stand it in good stead when bidding for projects in the region.

The German company is not yet a producer in the Arabian Gulf, but aims to make it one of its core areas of operations - alongside Europe, Russia, North Africa and South America - by pumping a minimum of 50,000 barrels of oil equivalent per day in the region.

Beyond Abu Dhabi, Wintershall is appraising an offshore gasfield in Qatar.

While the company's current exposure to the region is gas-heavy, Mr Seele is seeking to grow its oil production.

"I am very keen to increase the oil component in our portfolio. We are concentrating a bit more on oil projects now," he said. Wintershall recently added to its oil reserves by gaining stakes in Norwegian offshore fields through an asset swap with Norway's Statoil.

The Wintershall-OMV partnership aims to start drilling work in Shuwaihat within the first half of next year. Progress depends in part on the availability of drilling rigs, which are in short supply as a high oil price over the past two years has intensified the search for new sources.

Shuwaihat is part of a string of onshore fields that have recently been awarded separately to the main onshore concession in Abu Dhabi, the 1.4 million barrels per day (bpd) operation run by Adco, a consortium of Adnoc and international oil majors.

Korean and Chinese state-owned oil companies are preparing to explore great swaths of land in the emirate.

Al Hosn Gas, a joint venture between the American company Occidental and Adnoc, is close to completing the Shah Gas project, which will yield 500 million cubic feet a day of de-sulphurised gas by 2014.

Natural gas is core to Adnoc's activities, as the national oil company races to stave off a shortage caused by surging demand from power generation and industry.

 

fneuhof@thenational.ae