The Concession, which has a term of 40 years, was signed by Mr Shashi Shanker, Chairman, ONGC Group of companies and His Excellency Dr Sultan Ahmed Al Jaber, Chief Executive Officer, ADNOC Group and member of Abu Dhabi's Supreme Petroleum Council, in the presence of Hon'ble PM Shri Narendra Modi and His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the United Arab Emirates Armed Forces.
OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), along with Indian Oil Corp (IOC) and a unit of Bharat Petroleum Corp Ltd (BPCL) paid a signing amount of $600 million for a 10 per cent stake in Abu Dhabi National Oil Co's (ADNOC) 40-year Lower Zakum Concession, Offshore Abu Dhabi.
In August, ADNOC said it would split its ADMA-OPCO offshore oil concession into two or more areas with new terms to unlock greater value and increase opportunities for partnerships.
The Indian organizations will pay 2.2. billion dirhams ($600 million) to Abu Dhabi for their stake in the field, as indicated by the announcement, putting the general estimation of the store at $6 billion.
The group headed by ONGC will be the first party to secure a stake in the offshore concession. The concession will be worked by Adnoc Offshore, a subsidiary of Adnoc, on behalf of all concession partners.
The concession deal "will help India meet its growing demand for energy and refined products, create opportunities for ADNOC to increase its market share in a key growth market, and build a solid foundation as ADNOC explores potential global investments, particularly focused on downstream opportunities", ADNOC's Chief Executive Sultan al-Jaber said in the statement.
Current production at the Lower Zakum field is about 400,000 barrels a day, and the plan is to increase the plateau target to 450,000 barrels a day by 2025, according to a statement from ONGC Videsh. OVL, along with Bharat Petroleum Corp and Indian Oil Corp, would pay $600 million for the stake in the concession which now produces around 7,00,000 barrels per day (bpd) of crude oil but is projected to touch a million bpd by 2021. The Indian win gives the country a direct stake in Middle Eastern barrels.
The deal enables Adnoc to tap demand in the world's second-most populous nation.
The company also said it had received more than 10 bids from firms seeking to operate these offshore fields.
"For India, it's a way to secure a lot of long-term oil supply to help fuel growing demand", said Edward Bell, a commodities analyst at lender Emirates NBD PJSC in Dubai.
The state producer signed deals past year with Chinese and Korean companies to partner in its main onshore fields for the first time. This agreement will enable Adnoc to cater to a part of India's massive oil demand, over 80 per cent of which is met by imports.
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