The Abu Dhabi National Oil Company (ADNOC) has announced that it has signed a concession agreement giving Cosmo E&P Albahriya Limited, the wholly-owned subsidiary of Cosmo Energy Holdings (Cosmo), the exploration rights for Abu Dhabi’s Offshore Block 4.
Abu Dhabi’s recently formed Supreme Council for Financial and Economic Affairs (SCFEA) has approved this award.
The award of Offshore Block 4 follows the recent exploration block awards to Occidental as well as the consortium led by Italy’s Eni and Thailand’s PTTEP, demonstrating the potential of ADNOC to consistently produce value in Abu Dhabi’s second competitive block of bidding and exploit its strategic alliances to facilitate the exploration and production of Abu Dhabi’s hydrocarbon capital.
The exploration concession agreement was signed by His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and CEO of ADNOC Group, and Hiroshi Kiriyama, CEO of Cosmo Group.
Under the terms of the deal, Cosmo will have a 100% stake in the discovery process, spending up to $145 million in exploration and evaluation drilling, including participation fees, to discover and analyze oil and gas prospects in a block that covers an offshore area of 4,865 square kilometers northwest of Abu Dhabi City.
Following a successful commercial discovery during the exploration process, Cosmo would be entitled to a supply concession to establish and manufacture those commercial discoveries. ADNOC has the option of holding a 60 percent interest in the concession process of development. The length of the development process is 35 years from the start of the discovery phase and the block provides the opportunity to generate substantial in-country value for the UAE over the life of the concession.
In addition to drilling discovery and evaluation wells, the exploration process will see Cosmo exploit and contribute financially and technically to the ADNOC mega seismic survey, which acquires 3D seismic data within the block field. The data already collected over a significant part of the block, together with its proximity to developed oil and gas fields, indicate that the concession area has a promising potential.