Lukoil Enters UAE Upstream
Russian independent producer Lukoil has taken a 5% stake in Abu Dhabi's Ghasha concession, it said the day of the signature, October 15. The deal was signed by Lukoil CEO Vagit Alekperov and Abu Dhabi National Oil Company (Adnoc) CEO Sultan Ahmed Al Jaber and is Lukoil's first venture into the United Arab Emirates. Adnoc wants the state to be be self-sufficient in gas.
Ghasha entails work on so-far undeveloped deposits of gas, oil and gas condensate that form part of nine shallow fields in the Arabian Gulf west of Abu Dhabi. Existing partners are Italian Eni (25%), Germany's Wintershall DEA (10%) and Austrian OMV (5%).
The project is expected to produce over 40mn m³/day of gas and 120,000 barrels/day of crude oil and gas condensate. In addition, the two companies, plus Russian sovereign wealth fund Russian Direct Investment Fund (RDIF), signed a tripartite framework agreement on future co-operation in relation to the Ghasha concession.
Alekperov said Lukoil had "extensive experience in offshore fields, both independently and in consortia with other major international companies. We are glad to enter the project in the UAE with such a significant resource base and with such experienced partners. Joining this project is fully consistent with our strategy.”
Al Jaber reciprocated, saying the framework agreement with Lukoil and RDIF builds on the award and offers potential for collaboration in relation to the Ghasha concession. The concession award, as well as the framework agreement, reflect the strong and strategic bilateral ties between the UAE and Russia, he said.
RDIF boss Kirill Dmitriev said: “The large-scale project to develop the Ghasha Concession opens up great investment opportunities for RDIF and Lukoil" and demonstrates "the confidence in the expertise of partners from the Russian Federation to help develop one of the major natural resources projects in the Middle East."
The deal was signed during the Middle Eastern visit by Russian president Vladimir Putin, which began in Saudi Arabia October 14. A string of deals and agreements were signed in Riyadh, relating mainly to the purchse of Russian-made sub-sea oil and gas production equipment.