PM Modi gets oil field stake during UAE visit
Oil and Natural Gas Corp (ONGC) led Indian oil companies has signed a Memorandum of Understanding for a 10% stake for US$600 million in Abu Dhabi’s offshore oil Lower Zakum Concession.
Indian consortium of OVL, BPRL and IOCL will join Abu Dhabi National Oil Company (ADNOC) in the offshore concession for 40 years from 9 March 2018 to 2057.
Thirty per cent of the participating interest will awarded to other international oil companies while ADNOC will retain the controlling 60% in the field.
Lower Zakum makes up the former ADMA offshore concession, namely Lower Zakum, Umm Shaif and Nasr and Sateh Al Razboot (SARB) and Umm Lulu.
The consortium, led by India’s ONGC Videsh, contributed a participation fee of AED 2.2 billion (US$600 million) to enter the concession.
This is a first oil field deal between India and the emirates which was witnessed by Prime Minister Narendra Modi, Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan and Deputy Supreme Commander of the UAE Armed Forces on 11 Feb 2018.
The concession will be operated by ADNOC Offshore, a subsidiary of ADNOC, on behalf of all concession partners.
The agreement, which has a term of 40 years and an effective date of March 9, 2018, was signed by Sultan Ahmed Al Jaber, ADNOC Group Chief Executive Officer, and member of Abu Dhabi’s Supreme Petroleum Council and Shashi Shanker, Chairman, ONGC Group of companies.
ADNOC has also exchanged an agreement with the Indian Strategic Petroleum Reserves Ltd (ISPRL) to implement the strategic crude oil storage facility, in the southern Indian city of Mangalore in Karnataka.
It would store 5.86 million barrels of ADNOC crude oil in underground facilities.
The decision to establish the strategic reserve was announced, in January 2017, during a visit to India by Sheikh Mohamed bin Zayed.
This is a first oil field deal between India and the emirates which was witnessed by Prime Minister Narendra Modi, Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan and Deputy Supreme Commander of the UAE Armed Forces on 11 Feb 2018.
Speaking at the signing of the agreement, Prime Minister Modi said, “The offshore concession … befits the comprehensive strategic partnership between our two countries.”
“I am happy to note that we have progressed from a buyer-seller relationship to an era of mutual investments in the oil and gas sector,” he said.
“Our strategic partnership with ONGC, and the other members of the consortium, marks a new chapter in the strategic and economic relationship between the UAE and India.
The Indian consortium is made up of ONGC’s wholly-owned subsidiary ONGC Videsh, which has stakes in 39 oil and gas projects, in 18 countries; the Indian Oil Corporation, India’s largest commercial enterprise, encompassing the entire hydrocarbon value chain.
The ONGC caters to nearly half of India’s petroleum consumption with 11 of India’s 23 refineries a 13,000-km pipelines network and a countrywide marketing set-up of over 47,000 customer touch-points.
Bharat PetroResources has stakes in 23 oil and gas assets in seven countries and subsidiary of Bharat Petroleum Corporation Limited which has interests encompassing the entire hydrocarbon value chain. fii-news.com
