UAE’s ADNOC signs $1.5 bln offshore concession deal with Cepsa

UAE's Abu Dhabi National Oil Company (ADNOC) on Sunday awarded a 20 percent stake in its offshore SARB and Umm Lulu concession to Cepsa, a Spanish oil and gas company.

Cepsa, wholly owned by Abu Dhabi’s Mubadala Investment Company, paid a participation fee of AED 5.5 billion ($1.5 billion) to enter the concession, ADNOC said in a statement.

The 40-year concession agreement, which will come into effect from March 9, is part of ADNOC’s strategy to maximize returns from its resources and expand its downstream business.

ADNOC will retain a 60 percent stake in the concession that will be operated by its subsidiary, ADNOC Offshore, the statement added.

The concession area includes up to two main fields under development, Umm Lulu, which is part of the former ADMA offshore concession, and SARB, as well as two smaller fields, Bin Nasher and Al Bateel.  

ADNOC is finalizing concession agreements with other potential partners for the remaining stakes in the SARB and Umm Lulu, the Lower Zakum and the Umm Shaif and Nasr concessions, it said.

Earlier this month, ADNOC awarded a 10 percent interest offshore Lower Zakum concession to an Indian consortium, led by ONGC Videsh.

Separately, ADNOC and Cepsa plan to progress the basic engineering of the proposed Linear Alkyl Benzene complex in Ruwais, Abu Dhabi, this year.