Abu Dhabi gets bids for offshore oil fields

Bloomberg

Abu Dhabi’s government oil producer received bids in the fourth quarter from international energy companies seeking stakes in offshore fields that pump about 25 percent of the Persian Gulf
emirate’s crude. Abu Dhabi National Oil Co. is reviewing commercial bids from the companies it will choose from to help develop the deposits in a new joint venture, Adnoc said in response to questions. Adnoc didn’t identify the bidders or say when it would make a decision. The existing venture expires in March.
Plans to expand production at the offshore block are part of Abu Dhabi’s effort to raise output capacity to 3.5 million barrels a day later this year from about 3.15 million currently.
The new contracts will govern operations at the deposits for several decades. The fields currently produce about 700,000 barrels a day, with a target to pump 1 million barrels a day by 2021.
Middle Eastern producers are trying to wring more crude from aging fields. With global demand seen rising about 2 percent this year to about 100 million barrels a day,producers such as Abu Dhabi are turning to international partners, increasingly from oil-importing countries in Asia, to help boost their capacity to meet future demand. Abu Dhabi, capital of the United Arab Emirates, holds about 6 percent of global crude reserves.
Under the contract for the new venture, international companies will no longer receive a fixed fee for each barrel of oil they produce, according to people with knowledge of the situation. Instead, the partners will receive shares of the oil produced at the fields and any profit from sales of the crude minus costs, taxes and royalties paid to the government, said the people.
In another change, the single offshore block will be divided into three parts, the people said.
One area will contain the Lower Zakum field, a second will include the Umm Shaif and Nasr deposits and the third will comprise the Satah Al Razboot and Umm Lulu fields, they said.