BP signs onshore oil deal with Abu Dhabi worth $2.22 billion

• Share on Facebook
• Share on Bluesky
• Share on X
• Copy Link

News of the deal came without warning Saturday after years of negotiations between London-based BP and Abu Dhabi, the capital of the seven sheikhdoms that form the UAE.

industry gathering

Core Days organizer believes mining industry on the edge of renewed prosperity

10h ago

'I WANT TO FEEL SAFE'

Meadow Lake residents raise safety concerns over unhoused individuals in RBC vestibule

10h ago

"We need more homes and faster."

Housing crunch could threaten growth plans in Prince Albert, Humboldt

10h ago

BP had held a 9.5-per cent interest in the onshore concession that expired in late 2014. That year, the company’s overall crude production dropped 2.4 per cent, something it blamed in part on losing the Abu Dhabi concession.

BP said Saturday’s deal includes the UAE’s Bab, Bu Hasa, Shah and Asab fields, which will produce between 20 billion to 30 billion barrels of oil equivalent over the 40-year term of the concession. BP will be entitled to 10 per cent of its anticipated production of 1.66 million barrels of oil per day under the deal.

BP also operates in separate, offshore Abu Dhabi oil concessions.

Sultan Ahmed al-Jaber, director of the state-run Abu Dhabi National Oil Co. and Emirati Minister of State, said in statement that BP “has long been a strategic partner to Abu Dhabi.”

“This agreement marks a milestone in our efforts to forge new partnership models that bring technology, expertise and financing aimed at maximizing the value of our resources and supporting the transfer of knowledge,” al-Jaber said.

But those negotiations apparently were fierce and took time. France’s Total SA earlier reportedly agreed to pay $2.2 billion for a 10-per cent concession for 40 years and $2.85 for every barrel of oil sold.

Japan’s INPEX Corp. holds a 5-per cent stake while GS Energy of South Korea holds 3 per cent in the onshore concession operated by the Abu Dhabi Company for Onshore Petroleum Operations, also known as ADCO.

BP said Saturday that Abu Dhabi continues to look for foreign partners to take on a remaining 12-per cent stake.

The UAE’s state-run WAM news agency put the stock deal’s value at $2.22 billion. BP declined to offer a specific figure.

The agreement will catapult Abu Dhabi into the top tier of BP stockholders, putting it ahead of Kuwait and Norway’s sovereign wealth funds, which each hold over 1.7 per cent of the company.

The deal comes as oil prices, which fell from highs of over $100 a barrel in mid-2014 to $30 this year, have clawed their way back to $50.

Part of that is due to OPEC members, including the UAE, agreeing to pare 1.2 million barrels a day of their production, while nonmembers pledged an addition daily 558,000-barrel cut. It’s the first joint production cut in 15 years.

___

Follow Jon Gambrell on Twitter at www.twitter.com/jongambrellap . His work can be found at http://apne.ws/2galNpz .

Jon Gambrell, The Associated Press