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ADNOC, Russia Advance Oil and Gas Partnerships

Source: ADNOC.

Abu Dhabi National Oil Company (ADNOC) signed separate agreements this week involving oil and gas industry collaboration with Russian oil and gas giants Lukoil and Gazprom Neft and the Russian Energy Agency (REA).

In two pacts, ADNOC awarded a 5% stake in the Ghasha Concession to Lukoil, and the companies along with the Russian Direct Investment Fund agreed to explore future cooperation on the concession, which is a gas, oil, and gas condensate development targeting nine shallow-water fields in the Arabian Gulf west of Abu Dhabi.

This comes with a concurrent announcement of a framework agreement between ADNOC and Gazprom Neft in which the firms will study opportunities for collaboration in sour-gas exploration and production, developing enhanced oil and gas recovery strategies, and developing innovative technologies for investigating carbonate reservoirs.

The ADNOC-Gazprom Neft agreement creates a platform for potential collaboration in developing production-analytical systems in oil and gas exploration, production, logistics, processing, and sales. The firms will also assess opportunities for joint projects in geological prospecting and oil- and gas-field development, including those related to concessions in the Emirate of Abu Dhabi.

Further areas for potential technological cooperation between ADNOC and Gazprom Neft include developing management systems, information technologies, and artificial intelligence.

Under the terms the ADNOC-REA agreement, partnerships will be sought related to:

  • Abu Dhabi’s exploration and production concessions. This follows the March conclusion of Abu Dhabi’s first-ever competitive exploration and production bid round.

  • Refining and petrochemicals opportunities in Abu Dhabi and internationally. At the heart of ADNOC’s downstream expansion strategy is a $45-billion investment plan aimed at creating the world’s largest integrated refining and petrochemicals complex in Ruwais in the Emirate of Abu Dhabi, which will triple the company’s production of petrochemicals to 14.4 million tons/year by 2025.

  • Marketing, sales, and trading projects in Abu Dhabi and internationally. ADNOC in August acquired a 10% stake in VTTI BV, a global storage terminal owner and operator, in an effort to gain better global access to customers and respond more quickly to market dynamics while capturing trading value throughout its supply chain.

  • LNG as part of ADNOC’s integrated gas strategy. The company said the strategy calls for it to seize incremental LNG and gas-to-chemicals growth opportunities, leveraging “UAE’s dynamic demand-supply position” and the evolving energy mix.

  • Technical and operational support in artificial intelligence and other advanced technologies that can help optimize performance and drive efficiencies.

“Russia and the United Arab Emirates are among the largest producers and exporters of hydrocarbons in the world. The new agreement opens up new promising areas for partnership between our countries,” said Oleg Valerievich Zhdaneev, head of REA’s technology development division. 

ADNOC’s 2030 growth strategy includes an expanded approach to partnerships and strategic investment. As part of the approach, the company has broadened its investor base to include specialist infrastructure and energy investors, long-term global investment institutions, and other players in the global energy, services, and petrochemicals sectors.

Last year, UAE and Russia signed a Declaration of Strategic Partnership to cooperate in areas such as politics, security, economy, and culture. In 2018, bilateral trade between the UAE and Russia topped $3 billion, a 21% increase from the previous year.

ADNOC, Russia Advance Oil and Gas Partnerships

16 October 2019

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