US oil giant ExxonMobil and Abu Dhabi's national oil company have met to discuss new opportunities for collaboration in the upstream and downstream sectors.
The discussions were held during a joint visit to review the two firm's US$ 30 billion (AED 110 billion) Upper Zakum expansion project, which will take the development up to a production capacity of 750,000 barrels per day (b/d) and then 1 million barrels per day (MMb/d), with the latter planned for 2024.
His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of the Abu Dhabi National Oil Company (ADNOC), and Darren W. Woods, Chairman and CEO of Exxon Mobil Corporation (ExxonMobil) met and inspected key facilities at Al Ghallan Island which is under development for future production as part of the ongoing project, known as UZ750.
The UZ750 project is estimated to see an investment of around $ 21.8 billion (AED 80 billion) and comprises four new artificial islands, to accommodate drilling rigs, processing facilities and infrastructure required to handle production capacity growth to 750 mbpd, effectively creating an onshore environment offshore.
H.E. Dr. Al Jaber and Woods discussed the new substantial conventional and unconventional oil and gas exploration opportunities in Abu Dhabi, following ADNOC’s announcement, last week, to offer five major offshore and onshore blocks for competitive bidding. The CEOs also discussed downstream investments, including gas and liquefied natural gas (LNG) opportunities, following ADNOC’s 2018 announcement of ambitious expansion plans in Petrochemicals and Refining.
H.E. Dr. Al Jaber said: “Our partnership with ExxonMobil going back 80 years reflects the strong, deep-rooted and long-standing economic and political ties between the UAE and the US. Our existing partnership with ExxonMobil on the Upper Zakum field is a prime example of how ADNOC engages with world-class partners that bring expertise and advanced technology to unlock value from our resources, for mutual benefit, and deliver the greatest possible returns to the UAE. We are keen to strengthen this strategic partnership across the entire value chain, as we accelerate delivery of our 2030 smart growth strategy.”
Woods said: “We have shared many successes in the UAE together over the past 80 years, most notably with ADNOC in the Upper Zakum joint venture, and we look forward to building on this strong foundation. The joint success between ADNOC and ExxonMobil on Upper Zakum is a testament to what is possible when national and international energy companies work together.”
The visit follows the award, in April, by ADNOC and its joint venture partners, ExxonMobil Abu Dhabi Offshore Petroleum Company Limited and INPEX Corporation (INPEX), of a front-end engineering design (FEED) contract to increase the production capacity of the Upper Zakum oilfield to 1 mmbpd.
The Upper Zakum oilfield, located offshore Abu Dhabi, is the second-largest offshore oilfield and the fourth-largest oilfield in the world. The expansion project is part of ADNOC’s plan to increase its oil production capacity to 4 MMb/d by 2020 and to 5 MMb/d by 2030.
The Upper Zakum Development utilizes extended reach drilling to optimize well numbers and enable maximum reservoir contact. In recent years, the Development saw one of the world’s longest wells at 35,800 feet measured depth.
The Upper Zakum Development also has shared multi-well pad drilling and streamlined rig utilization with the Lower Zakum Concession to enable efficiencies and optimizie costs. In addition, extended reach drilling activity for the Lower Zakum Concession is expected to start later this year from Upper Zakum’s Al Ghallan Island.
As a result of ADNOC’s long-standing experience in utilizing artificial islands, it has also adopted this approach in the development of the Ghasha Concession where 10 artificial islands are being constructed for the Hail, Ghasha and Dalma offshore sour gas megaproject.
In October 2018, Baker Hughes, a GE company, acquired a five per cent stake in ADNOC’s subsidiary, ADNOC Drilling, in a transaction that valued ADNOC Drilling at approximately $ 11 billion (AED 40.3 billion). In addition, in February this year, ADNOC signed an agreement awarding Occidental Petroleum an onshore block following Abu Dhabi’s first-ever competitive exploration bid round.
ADNOC also collaborates with Occidental in onshore sour gas production and processing through ADNOC Sour Gas, a joint venture company between ADNOC, which owns a 60 per cent share and Occidental, which owns a 40 percent share.
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