Adnoc, ExxonMobil explore new opportunities for collaboration

Dr. Sultan Bin Ahmad Sultan Al Jaber, Minister of State and Group CEO of the Abu Dhabi National Oil Company (Adnoc), and Darren W. Woods, Chairman and CEO of Exxon Mobil Corporation (ExxonMobil), met to explore new opportunities for collaboration in the upstream and downstream sectors, and discuss wider regional and business-related developments of mutual interest.

The discussions coincided with a joint visit to review the progress of over $30 billion (Dhs110 billion) expansion taking Upper Zakum to a production capacity of 750 thousand barrels per day (mbpd) and 1 million barrels per day (mmbpd) respectively, with the latter planned for 2024.

Adnoc is leveraging mutually beneficial partnerships to drive new commercial opportunities and expand its portfolio across the upstream and downstream sectors, to enable the UAE’s socio-economic development objectives.

Dr. Al Jaber said, “Our partnership with ExxonMobil going back 80 years reflects the strong, deep-rooted and long-standing economic and political ties between the UAE and the US. At Adnoc, we continue to place great importance on our strategic partnerships with the US energy sector, which has contributed to further enhancing the economic relations between our two countries.  “Our existing partnership with ExxonMobil on the Upper Zakum field is a prime example of how Adnoc engages with world-class partners that bring expertise and advanced technology to unlock value from our resources, for mutual benefit, and deliver the greatest possible returns to the UAE. We are keen to strengthen this strategic partnership across the entire value chain, as we accelerate delivery of our 2030 smart growth strategy.”

During the visit, Dr. Al Jaber and Mr. Woods inspected key facilities at Al Ghallan Island which is under development for future production as part of the ongoing project, known as UZ750, to increase the production capacity of the Upper Zakum field to 750 mbpd.

They also planted a Ghaf tree on the island, celebrating the UAE’s national tree and official symbol of the ‘Year of Tolerance.’ The evergreen tree, native to the desert, is an important part of the UAE’s rich heritage, symbolizing resilience, unity, and peace.

Woods said, “We have shared many successes in the UAE together over the past 80 years, most notably with Adnoc in the Upper Zakum joint venture, and we look forward to building on this strong foundation. The joint success between Adnoc and ExxonMobil on Upper Zakum is a testament to what is possible when national and international energy companies work together.”

The UZ750 project is estimated to see an investment of around $21.8 billion (Dhs80 billion) and comprises four new artificial islands, to accommodate drilling rigs, processing facilities and infrastructure required to handle production capacity growth to 750 mbpd, effectively creating an onshore environment offshore.

Dr. Al Jaber and Woods discussed the new substantial conventional and unconventional oil and gas exploration opportunities in Abu Dhabi, following Adnoc’s announcement, last week, to offer five major offshore and onshore blocks for competitive bidding.

The CEOs also discussed downstream investments, including gas and liquefied natural gas (LNG) opportunities, following Adnoc’s 2018 announcement of ambitious expansion plans in Petrochemicals and Refining.

ExxonMobil and ADNOC share a long history of technical collaboration in the downstream business both through licensing of technologies as well as support in catalysts. Both companies are exploring means by which this relationship can be extended further into research and development (R&D).

The visit follows the award, in April, by Adnoc and its joint venture partners, ExxonMobil Abu Dhabi Offshore Petroleum Company Limited and INPEX Corporation (INPEX), of a Front-End Engineering Design (FEED) contract to increase the production capacity of the Upper Zakum oilfield to 1 mmbpd by 2024.

The 1 mmbpd expansion project, which is an integral component of Adnoc’s plan to increase its oil production capacity to 4 mmbpd by 2020 and 5 mmbpd by 2030, is estimated to cost approximately $8 billion (Dhs29.4 billion), including drilling-related expenditure. It will capture synergies from the existing UZ750 project, optimizing costs and maximizing value for Adnoc and its partners.

The Upper Zakum Development utilises extended reach drilling to optimise well numbers and enable maximum reservoir contact. In recent years, the Development saw one of the world’s longest wells at 35,800 feet measured depth.

The Upper Zakum oilfield, located offshore Abu Dhabi, is the second-largest offshore oilfield and the fourth-largest oilfield in the world.

WAM