Total confirms a payment of $1.45 billion for stake in offshore oilfields in Abu Dhabi
Total SA has announced it will pay $1.45 billion for stakes in two offshore fields in Abu Dhabi. This confirmation will further solidify its year-long relationship as the UAE continues to look to expand its production levels.
According to Abu Dhabi National Oil Co (ADNOC), Total SA will acquire a 20% stake in the Umm Shaif Nasr oil field and support the development of natural gas at the site. Sultan Al Jaber, the CEO of ADNOC and Patrick Pouyuanne, the CEO of Total agreed that Total would also acquire a 5% stake in the Lower Zakum oil field.
Abu Dhabi contains over 5% of the worldwide crude reserves and produces nearly all of the oil for the UAE. The UAE is making significant efforts to eradicate its output to remove a global glut. However, Abu Dhabi is planning to extend its overall capacity to nearly 3.5 million barrels a day by the end of 2018. ADNOC has suggested it is capable of pumping nearly 3 millions barrels a day, with nearly half of this supply coming directly from offshore deposits. The region is also looking to expand its gas production to generate energy for both industry and households.
Al Jaber has highlighted that the recent agreement with Total will further enhance the development of the Umm Saif gas field, suggesting the site has the potential to generate nearly 500 million cubic feet of gas. Total have stated that they intend to increase the output capacity at Umm Shaif from 300 000 to nearly 500 000 barrels of crude a day.
The new deal, which will extend for forty years makes Total, the fifth international business to collaborate in the region. Total will join Eni Spa at the Lower Zaum and Umm Shaif and Nasr fields. A series of Indian businesses have also secured stakes in the Lower Zakum fields.
Pouyanne added that the agreements will ensure that Total secures access to considerable and competitive resources of hydrocarbons for a long period. Total confirmed a fee of $1.15 billion for its share in the Umm Shaid and Nasr fields. It will also pay a further $300 million for its stake in Lower Zakum.
According to ADNOC, the Lower Zakum field has a targeted production capacity of nearly 500,000 barrels a day, whilst the SARB and Umm Lulu fields will generate in excess of 200,000 barrels a day.
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