Adnoc Review 2017

Adma-Opco ... getting integrated with Zadco

Adma-Opco ... getting integrated with Zadco

Abu Dhabi integrates firms creating new offshore entity

Adma-Opco and Zadco are currently pressing ahead with capacity expansion plans, which are central to Abu Dhabi’s goal of increasing overall production capacity from the current roughly 3 mbpd to 3.5 mbpd by 2019 and 3.8 mbpd by around 2024

Abu Dhabi National Oil Co (Adnoc) announced plans to consolidate its two offshore operating companies into a single entity but says its international partners in the existing concessions would not be affected.

Adnoc will integrate the offshore operations of Abu Dhabi Marine Operating Co (Adma-Opco), in which BP, Total and Japan’s Inpex are shareholders, with those of Zakum Development Co (Zadco), a joint venture (JV) with Inpex and ExxonMobil.

The integration is the latest of a series of changes to be made at state-run Adnoc, traditionally a conservative state-run entity, since Sultan Al Jaber took over as group CEO in February 2016.

It will help fulfil Adnoc’s "strategic imperative of creating a more profitable upstream business," says Al Jaber, whose company is looking to drive efficiency and synergies during the oil-price downturn.

Adma-Opco and Zadco are currently pressing ahead with capacity expansion plans, which are central to Abu Dhabi’s goal of increasing overall production capacity from the current roughly 3 mbpd to 3.5 mbpd by 2019 and 3.8 mbpd by around 2024.

Zadco is developing the Upper Zakum field, one of the world’s largest offshore oil fields with an in-place resource base of some 50 billion barrels. Its production is being expanded from 700,000 bpd now to 750,000 bpd by 2017.

Adma-Opco, meanwhile, is developing the Lower Zakum field, which was scheduled to reach 425,000 bpd of output by 2016.

There are synergies from an integrated approach to developing the Upper Zakum and Lower Zakum fields, which make up different layers of the massive Zakum structure, industry sources say.

Adma-Opco chief executive Yaser Al Mazrouei has been appointed as the CEO of both offshore operators to oversee the consolidation. Adnoc and its partners will form a steering committee for the process, which is projected to be concluded by early 2018.

But the move won’t change Adnoc’s plans to seek new partners for the Adma-Opco concession, which will expire in March 2018, the company says in an emailed statement.

Adnoc will continue to "review and consider all options, and pursue partners for concessions expiring in 2018," Al Jaber says. The Adma-Opco concession was due to go to a re-tender this year, although the exact timing and format have yet to be released.

Equity stakes totaling 22 per cent also remain up for grabs in Adnoc’s onshore concession, operated by Abu Dhabi Co. for Onshore Petroleum Operations (Adco), with Total (10 per cent), Inpex (5 per cent) and South Korea’s GS (3 per cent) already on board.

Cyril Widdershoven, an energy analyst and partner at Dutch consultancy Verocy, says the technological challenges for Adma-Opco and Zapco were clear, with gas reinjection or carbon dioxide enhanced oil recovery (CO2 EOR) needed at both.

"A combined approach, in which not only JV partners are going to be forced to speak to each other while addressing future production plans, drilling schemes or need for new technology, is of the utmost importance," he says.




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