A Pakistan Petroleum Limited-led consortium of four public sector exploration and production (E&P) entities has secured a major exploration opening — Offshore Block 5 — in Abu Dhabi’s second competitive exploration block bid round, involving an investment of about $400 million.
The exploration concession agreement was signed by PPL MD and CEO Moin Raza Khan, on behalf of the consortium, and the UAE Minister of Industry and Advanced Technology and Abu Dhabi National Oil Company (ADNOC) Managing Director and Group CEO Dr Sultan Ahmed Al Jaber on August 31.
The consortium has been awarded Offshore Block 5 in Abu Dhabi’s second competitive exploration block bid round. Offshore Block 5 covers an area of 6,223 square kilometres and is located 100 kilometres north east of Abu Dhabi city.
Besides PPL, who is the operator during the exploration phase, the consortium consists of three major Pakistani E&P companies: Oil and Gas Development Company Limited (OGDCL), Mari Petroleum Company Limited (MPCL) and Government Holdings (Private) Limited (GHPL).
In case of a successful commercial discovery during the exploration phase, the consortium will have the right to a production concession to develop and produce commercial discoveries. ADNOC will have an option to acquire a 60 per cent stake during the production phase of the concession.
The term of the production phase is 35 years from the commencement of the exploration phase.
Weeks ago, the Economic Coordination Committee (ECC) permitted these four companies to invest a total of $400mn ($100mn by each company) in Aug’21 for 5 years by issuance of Corporate Guarantees in favor of ADNOC and Supreme Council for Financial and Economic Affairs (SCFEA).
About two years ago, the Economic Coordination Committee of the cabinet had allowed the consortium to go for Abu Dhabi exploration with their initial investment out of their own resources.
Although the block offered by ADNOC falls within the prolific area known for its rich hydrocarbon reservoirs, in case of no discovery, the total exposure will be borne by the consortium without any liability on the Pakistan government.
Commenting on the development, Federal Minister for Energy, Hammad Azhar, said: “While Pakistan and UAE share long and friendly bilateral relations, this award is a new beginning for both on the energy front. As Pakistan addresses escalating energy demand in the country, such milestones for energy cooperation will surely assist the country towards bridging the energy supply and demand gap.”