Abu Dhabi to boost oil investor returns

dubai — Abu Dhabi’s state energy producer, which is seeking more partners to develop its fields, improved some terms in an oilproduction partnership to offer greater returns to international companies such as BP and Total, according to people with knowledge of the matter.

Abu Dhabi National Oil Co improved terms related to taxation and depreciation for companies in the venture, known as Abu Dhabi Co for Onshore Petroleum Operations (Adco), said the people, who asked not to be identified because the negotiations were private. The provisions were changed when BP joined in December, they said.

The UAE is boosting its production capacity even as it diversifies away from oil to build new industries and create jobs.

Adnoc is partnering with European and American companies that have pumped oil in the Middle East for more than a century as well as with comparative newcomers to the region from Asia to contribute technology needed to extend the life of its oil and natural gas reserves.

Total and BP each hold 10 per cent stakes in Adco, while Japan’s Inpex owns five per cent and GS Energy of South Korea three per cent. Adnoc, which aims to retain 60 per cent of the venture, is seeking partners for the remaining 12 per cent of Adco.

The Adco concession terms, which remain fundamentally unchanged, apply to all existing and future partners, an Adnoc media official said, asking not to be identified by name, in line with company policy. Adco pumps about half of Abu Dhabi’s roughly three million barrels of daily crude output. The emirate, with about six per cent of global oil reserves, is seeking to boost its production capacity to 3.5 million barrels a day by 2018.

BP has worked in Abu Dhabi since 1939 and was a partner in the emirate’s previous onshore oil concession, which expired in 2014 after 75 years.

Total was the first company to sign a new contract to continue developing the fields; the Parisbased company agreed in January 2015 to pay a $2.2 billion signing bonus to Adnoc.

BP, Total and Inpex are also partners with Adnoc in an offshore production venture, which expires next year. — Bloomberg