Adnoc awards $519m contract to identify, explore new resources

Business Bureau, Gulf today

The Abu Dhabi National Oil Company (Adnoc) announced on Thursday, the award of a contract worth up to $519 million (Dhs1.9 billion) to further expand the scope of the world’s largest combined three-dimensional (3D) onshore and offshore seismic survey, which is currently taking place in the Emirate of Abu Dhabi.

The expansion underscores the important role seismic surveying plays in enabling Adnoc to identify and explore new hydrocarbon resources as highlighted by the recent major discoveries of recoverable unconventional oil resources and conventional oil reserves announced by Abu Dhabi’s Supreme Petroleum Council (SPC) earlier this week.

In addition, this mega seismic survey also supported the discovery of the conventional oil and gas reserves and the unconventional gas resources added to ADNOC’s portfolio in 2019.

The contract was awarded to BGP Inc., a subsidiary of China National Petroleum Company (CNPC), represented in the United Arab Emirates (UAE) by Al Masaood Oil Industry Supplies & Services Co. This new award brings the total area to be covered by the survey up to 85,000 km2 and reinforces Adnoc’s commitment to unlocking the full potential of Abu Dhabi’s vast hydrocarbon resources.

50 per cent of the award value will flow back into the UAE’s economy under Adnoc’s In-Country Value (ICV) programme, highlighting how Adnoc continues to prioritise ICV as it invests responsibly to deliver its 2030 strategy.

Yaser Saeed Al Mazrouei, Adnoc Upstream Executive Director, said: “This award builds on the solid progress we are making in executing the world’s largest combined 3D seismic survey which is an important part of our strategy to accelerate the exploration and development of Abu Dhabi’s hydrocarbon resources. It further demonstrates ADNOC’s commitment to realizing the full potential of our conventional and unconventional oil and gas resources to ensure the UAE remains a long-term and reliable energy provider to the world. The award follows a competitive tender process that ensures a significant portion of the value will flow back into the UAE’s economy, supporting local businesses in line with the leadership’s wise directives.”

This contract increases the scope of the ongoing seismic mega survey to capture coastal areas, islands, and shallow water. It will utilise state-of-the-art technologies including cableless equipment and a wide range of environmentally friendly seismic sources

The seismic acquisition will capture high-resolution 3D images of the complex subsurface structure at ultra-deep locations and help to pinpoint potential hydrocarbon reservoirs by deploying industry-leading technologies to provide high-density survey data which is analyzed at Adnoc’s Thamama Subsurface centre.

This data is being leveraged by all of the successful exploration partners in Abu Dhabi’s first block bid round and the data will also be available, for a cost, to the successful bidders in the second bid round, which will begin to be awarded this year following the SPC’s recent approval.

In July 2018, Adnoc awarded the first set of contracts for the seismic survey and has so far recorded almost 60% progress in executing the initial scope which includes onshore and offshore areas. The entire survey, including the added coastal scope, is on track to be completed in 2024.

Earlier this week, the SPC announced the discovery of recoverable unconventional oil resources estimated at 22 billion stock tank barrels (STB) and an increase in conventional oil reserves of 2 billion STB which boosted the UAE’s conventional reserves to 107 billion STB.

In November 2019, the SPC announced increases in hydrocarbon reserves of 7 billion STB of oil and 58 trillion standard cubic feet (TSCF) of conventional gas, as well as the discovery of unconventional recoverable gas resources totaling 160 TSCF.

As part of the selection criteria for contract awards, Adnoc carefully considers the extent to which bidders would maximize ICV in the delivery of a project. This is a mechanism integrated into Adnoc’s tender evaluation process, aimed at nurturing new local and international partnerships and business opportunities, fostering socio-economic growth, and creating job opportunities for Emiratis.

This award prioritized UAE sources for materials, local suppliers, and workforce as well as advanced technologies.

 ADNOC is a leading diversified energy and petrochemicals group wholly owned by the Emirate of Abu Dhabi.

Adnoc’s objective is to maximise the value of the Emirate’s vast hydrocarbon reserves through responsible and sustainable exploration and production to support the United Arab Emirates’ economic growth and diversification.