India to sign offshore concession deal with Adnoc

Abu Dhabi: Abu Dhabi and India’s Oil and Natural Gas Corporation-led consortium were expected to sign a 10 per cent offshore concession agreement late on Saturday evening as Indian Prime Minister Narendra Modi arrived in the capital from Palestine.

The concession is valid for 40 years and this is the first time that an Indian company would be involved in the development of oilfields in Abu Dhabi.

The other members of the consortium are Indian Oil Corporation and Bharat Petro Resources Ltd, an upstream arm of refiner Bharat Petroleum Corporation, Reuters reported quoting sources. Participation fees for the deal are valued at $600 million.

An official announcement is expected later on Saturday.

Last year, Adnoc said the existing Adma-Opco (Abu Dhabi Marine Operating Company) concession will be split into two or more concessions with new terms to unlock greater value and increase partnership opportunities.

The existing concession, which is due to expire in March, produces around 700,000 barrels a day of oil and is expected to have a production capacity of about one million barrels per day by 2021.

The current shareholders in Adma-Opco are BP (14.67 per cent), Total (13.33 per cent) and Jodco (Japan Oil Development Company — 12 per cent).

Adnoc, on behalf of the Abu Dhabi government, will retain a 60 per cent shareholding in the new concession areas while the remaining 40 per cent will be given to different selected firms.

The awarding of concession to ONGC-led consortium comes as India and the UAE strengthen their energy ties following high-profile visits of Modi to the UAE in 2015 and the subsequent visits by His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, to India in 2016 and in early 2017.

Adnoc and the Indian Strategic Petroleum Reserves Ltd (ISPRL) agreed last year to establish a strategic crude oil storage in the southern Indian city of Mangaluru.

The agreement with ISPRL, an Indian government-owned company mandated to store crude oil for emergency needs, covers the storage of 5.86 million barrels of Adnoc crude oil in underground facilities, at the Karnataka facility.

Adnoc is also exploring options to supply crude oil to West Bengal’s Haldia Petrochemicals Ltd’s (HPL) new refinery in Kolkata, which will have a consumption capacity of 300,000 barrels of oil per day.

India is 79 per cent dependent on imports to meet its crude oil needs, eight per cent of which is supplied by the UAE.

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