OMV Signs Fresh Abu Dhabi Deal
Austria’s OMV, Abu Dhabi state upstream firm Adnoc and US producer Occidental (Oxy) signed a technical agreement over the weekend to evaluate oil and gas fields northwest offshore Abu Dhabi.
The deal strengthens OMV’s existing partnerships with Adnoc, and with Abu Dhabi generally, but the Austrian company has yet to produce oil or gas there.
Rainer Seele who took over as OMV’s chief executive in July 2015, signalled then that he wanted to beef up the Austrian firm’s upstream focus on Russia, Abu Dhabi and Romania. This weekend, he said that OMV was “pleased to expand our cooperation with Adnoc, together with Occidental.” Abu Dhabi state-owned International Petroleum Investment Company (Ipic) is OMV's second largest shareholder with 24.9% and the two companies co-own the Borealis chemicals group.
The contract, announced on March 20, relates to several undeveloped oil and gas fields in North-West Offshore Abu Dhabi including the Ghasha and Hail areas. The companies will conduct a four-year work programme for seismic, drilling and engineering work programme, with a view to exploration, appraisal and potential field developments. OMV and Oxy will provide seconded personnel and technical expertise.
OMV said the agreement “forms the basis for the future development of the North-West Offshore area” and will “intensify its strategic partnership with Adnoc alongside its existing participation in the appraisal of the sour gas Shuwaihat field and its East Abu Dhabi exploration activities.” OMV’s East Abu Dhabi exploration agreement was signed in 2013.
OMV together with German BASF's upstream subsidiary Wintershall signed a deal with Adnoc in 2012 to appraise Shuwaihat – with Wintershall as operator – with the first well spudded in 2014.
However in mid-February, OMV upstream chief Johann Pleininger said merely that appraisal of Shuwaihat was “ongoing”. Seele, whilst still CEO of Wintershall in early 2015, had said that initial results from the appraisal would “soon” be available.
Another region on OMV’s horizon is Iran. The firm last month said it would like to appraise and develop the Band-E-Karkeh oil field that it discovered, prior to sanctions being imposed in 2010, and to redevelop the Cheshmeh Khosh oil field.
Separately Oxy has partnered Adnoc on the Al Hosn Gas Project in Abu Dhabi, one of the largest gas fields in the Middle East, and is the second largest oil producer offshore neighbouring Qatar. It is also a partner in the Dolphin Gas Project, a leading cross-border gas project in the Arabian Gulf.
OMV produced 303,000 boe/d last year - split roughly evenly between oil and gas -- down slightly from 309,000 boe/d in 2014. Equity gas production remained level in both years at 8.6bn m³/y. Romania accounted for 170,000 boe/d in 2015, more than half total production, with none from Abu Dhabi.
Mark Smedley