News Desk
\nDUBAI
\nAbu Dhabi National Oil Company awarded exploration rights to a consortium of two Indian companies for Dh626 million for an onshore block, as part of its first licensing round.
\nBharat Petroleum Corporation and Indian Oil Corporation were awarded 100 per cent interest in the exploration phase to appraise undeveloped fields around Abu Dhabi\u2019s western region of Ruwais, Adnoc said on Monday.
\nThe Indian consortium will have the opportunity to develop the existing discoveries, with Adnoc retaining a 60 per cent stake during the production phase.
\n\u201cThe consortium of Bharat Petroleum Corporation and Indian Oil Corporation, both of whom Adnoc already partners with offshore, was selected after a very competitive bid round,\u201d Dr Sultan Al Jaber, Adnoc Group chief executive and UAE Minister of State said.
\nThe award to the Indian consortium concludes Adnoc\u2019s first-ever licensing round, which saw five of the six blocks tendered picked up by Italy\u2019s Eni, Thailand\u2019s PTT Exploration and Production Public Company, Occidental of the US and Japan\u2019s Inpex. Onshore Block 2, which had been part of the tendered concessions is currently being appraised for \u201cunconventional potential\u201d before the company considers further award decisions, an Adnoc spokesman told The National.
\nThe sale of exploration stakes to the Indian consortium is another indication of the Abu Dhabi company\u2019s increasing engagement with its consumer base in Asia. Adnoc last year awarded a consortium of Indian energy companies led by ONGC Videsh a 10 per cent interest in the offshore Lower Zakum block, following the split and reallocation of its Adma-Opco concessions.
\nIndian energy companies, which have until recently not had any presence in in the Middle East, are being increasingly wooed by state companies such as Adnoc, said Amit Bhandari, senior fellow, energy and environment with Mumbai-based think tank Gateway House.
\n\u201cOil demand from the traditional markets (US, Europe and Japan) is declining, while China\u2019s oil demand seems to be plateauing,\u201d he said. \u201cMoreover, the US is also likely to become a hydrocarbon exporter. India is likely to account for a large share of growth in the global oil demand over the next 20 years.\u201d
\nState-backed firms such as Bharat Petroleum and Indian Oil Corporation run a lucrative and strategic network of refineries and fuel distribution outlets in India as well.
\n\u201cHaving them as investors in its upstream assets should result in improved market access for Adnoc,\u201d added Mr Bhandari.
\nAdnoc also parks strategic crude reserves in the southern Indian city of Mangalore and is looking to develop a $44 billion integrated refinery on the country\u2019s western coast in partnership with Saudi Aramco.
\nThese moves while helping to lock-in long-term market share for the national oil company also allow for a consuming nation such as India to hedge against high oil prices. Countries such as India and China recently formed an \u2018Asian buyers\u2019 club\u2019 to negotiate for better pricing and mitigate the effects of highly volatile oil prices.
\n\u201cSuch investments therefore help cushion the impact of high energy prices for the Indian government, which has to provide subsidies to protect the most vulnerable consumers,\u201d said Mr Bhandari.
\nAdnoc meanwhile is likely to offer a second licensing round this year. The company announced in November discovery of deposits equivalent to a 1 per cent increase to existing oil reserves and a 7.1 per cent addition to proven gas reserves.
\nThe national oil company is widely expected to \u201ccontinue as they have been progressing,\u201d according to Tom Quinn, senior research analyst for Middle East at Wood Mackenzie.
\n\u201cThey\u2019ve managed to get a good mix of companies, international companies and Asian companies in terms of market size,\u201d he said. \u201cThey also managed to get some pretty big participation bonuses paid by these companies and having that capital upfront allows them to invest in capacity building projects and other projects.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
News Desk DUBAI Abu Dhabi National Oil Company awarded exploration rights to a consortium of two Indian companies for Dh626 million for an onshore block, as part of its first licensing round. Bharat Petroleum Corporation and Indian Oil Corporation were awarded 100 per cent interest in the exploration phase to appraise undeveloped fields around Abu […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-55983","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n