Abu Dhabi seeking bids for largest onshore oil fields on Feb. 10

ANTHONY DIPAOLA

DUBAI (Bloomberg) -- Abu Dhabi National Oil is seeking final bids by Tuesday for concessions to the emirate’s largest onshore fields, said Abdullah Nasser Al Suwaidi, director general of the state-owned company.

The offers must match terms of the agreement Adnoc reached with Total, Al Suwaidi said at a conference in Dubai. Total is Adnoc’s first partner in a 40-year concession to fields in the biggest sheikhdom of the United Arab Emirates.

Al Suwaidi declined to say if any more bidders than Total have made final offers. The deadline is Tuesday “for those who haven’t submitted,” he said. Al Suwaidi declined to specify the terms of Adnoc’s agreement with Total, saying the fee the Paris-based company will earn for each barrel of oil it may produce is confidential.

Middle Eastern oil producers are adding capacity to pump crude for export amid an oversupply that has cut prices in half in the last six months. Abu Dhabi plans to increase total production capacity to 3.5 MMbopd by the end of 2017 from about 3 MMbopd now. Adnoc announced its choice of Total as partner on Jan. 29 and said it would “soon” name others.

Brent crude, a benchmark for more than half of the world’s oil, has dropped 25% since the Organization of Petroleum Exporting Countries decided on Nov. 27 to keep its output target unchanged. Brent was trading at $57.95/bbl, up 15 cents, at 6:19 a.m. in London.

Spending Plans

The U.A.E., an OPEC member, holds about 6% of global oil reserves, with most of its oil and natural gas in Abu Dhabi. The 15 deposits in the Abu Dhabi concession will produce 1.8 MMbopd in 2017 from 1.6 MMbopd today, Adnoc and Total said on Jan. 29. Adnoc is spending about $22 billion on projects to increase onshore oil and gas production and export capacity, Omar Suwaina Al Suwaidi, its deputy director for strategy, said in Abu Dhabi on Nov. 11.

Royal Dutch Shell was still in talks with Adnoc about participating in the concession, CEO Ben Van Beurden said Jan. 29. BP, like Shell, was a partner in the group that previously operated the onshore fields and is “committed to Abu Dhabi for the long term,” Reem Mohammed, an Abu Dhabi-based spokeswoman, said Jan. 29.

Other companies Adnoc invited to bid include China National Petroleum, Japan’s Inpex, Korea National Oil, Norway’s Statoil, Occidental Petroleum of the U.S., Russia’s OAO Rosneft and Eni of Italy.