Eni Buys Upstream in Abu Dhabi: Update

(Updates with comment from Wood Mackenzie)

Eni signed two 40-year agreements in Abu Dhabi for acquisition of minority stake in offshore oil and gas fields, it said March 11, the same day it announced it had sold a 10% stake in the Zohr field to Abu Dhabi.

The Italian company will acquire 5% stake in the Lower Zakum offshore oil field and of a 10% stake in the oil, condensate and gas offshore fields of Umm Shaif and Nasr, for $875mn. 

“I'm very pleased about this agreement creating a larger presence for Eni in Middle East, in line with our expansion strategy, and creating a strong alliance with Adnoc and Abu Dhabi. The stakes in the two concessions give access to giant fields with huge potential and Eni is willing to contribute its best technology to maximize the future production,” said Eni's CEO Claudio Descalzi.

Sultan Ahmed Al Jaber, Adnoc Group CEO said, “Our partnership with Eni, and other concession partners, will enable us to accelerate our growth, increase revenue and improve integration across the upstream value chain, as part of our ongoing transformation and build on the foundations that have been laid to deliver a more profitable upstream business.”

Lower Zakum is about 65 km off the coast of Abu Dhabi while Umm Shaif and Nasr are about 135 km from the coast of Abu Dhabi. In both concessions, Adnoc owns a 60% stake. The operator is Adnoc Offshore.

Deal gives Eni foothold in ME

Wood Mackenzie said the deal with Adnoc "provides low-risk, long-term barrels, and lays the foundation for Eni’s Middle East portfolio. This is the first award by Adnoc to a major (in the offshore renewal), and shows it is looking to find a balance in its strategic partners between companies from major buyers, such as Japan and India, and IOCs with technology and project delivery expertise.”