The year 2015 may be relatively short on days so far, but it has been a hugely busy and productive period for Abu Dhabi National Oil Company, better known as Adnoc.
Adnoc was established in 1971 to operate in all areas of the oil and gas industry and since then has steadily broadened its activity in establishing companies and subsidiaries and creating an integrated oil and gas industry in the fields of exploration and production, support services, oil refining and gas processing, chemicals and petrochemicals, maritime transportation and refined products and distribution.
The Supreme Petroleum Council (SPC), chaired by His Highness Sheikh Khalifa Bin Zayed Al- Nahyan, President of the UAE and Ruler of Abu Dhabi, formulates and oversees the implementation of Abu Dhabi petroleum policies.
During the past 4 decades, Adnoc has expanded its business activities, enhanced its competitive position and so managed to become one of the world’s leading oil companies with substantial business interests in upstream and downstream activities, including transportation, shipping, marketing and distribution.
Over the years the company has diversified its group of energy and petrochemical companies, with a philosophy described on the corporate website: “Our business is about finding, producing and marketing the natural resources on which the modern world depends.
“The Group’s activities include exploration and production of crude oil and natural gas; refining, marketing, supply and transportation, and the manufacture of petrochemicals. Our integrated upstream and downstream activities are conducted by 16 specialist subsidiary and joint venture companies.
“As one of the world’s leading oil companies, producing over 2.7 million barrels of oil a day, we are committed to sustainable development, ensuring a harmonious balance between people’s needs and the Earth’s resources. Our track record in occupational health and safety, and protection of the environment, sets the standards for the rest of the Arabian Gulf.”
The result of diversification has seen Adnoc evolve into 15 subsidiary companies working in the various fields of the oil, gas, and petrochemical industry as well as crude oil and gas transport and services. They include ADCO, ADMA-OPCO, GASCO, ADGAS, ZADCO, TAKREER, NDC, ESNAAD, IRSHAD, FERTIL, BOROUGE, ADNATCO-NGSCO, ADNOC Distribution, Elixier and Al Hosn Gas.
With so many subsidiaries, it comes as little surprise that there is a constant stream of news regarding projects and contracts awarded.
In January 2015, the company hit the headlines when Abu Dhabi’s Supreme Petroleum Council selected France’s Total as the first partner in the new oil company formed to steward the emirate’s prime oilfields for the next 4 decades.
The selection process took a year of work to determine, which saw the Council, with the advice of Adnoc, evaluated the bids of 11 companies looking for a stake in the new concession to manage and develop the country’s 15 major onshore oilfields, which account for more than half the country’s current production capacity of about 3 million barrels per day.
The oilfields are a crucial commodity within Abu Dhabi, representing the largest source of the Emirate’s wealth, bringing in between US$50 billion and $60 billion in revenue last year when world oil prices averaged nearly $100 a barrel.
Following the signing of the agreement, Adnoc issued a statement: “By this agreement, Total, which presented the best technical and commercial offers, receives a 10 per cent participating interest in the new concession and is appointed asset leader for the South East and Bu Hasa integrated Asset Groups, with effect from January 1 2015, while additional companies will be added soon.”
Just a month later, it was announced that Occidental Petroleum had successfully won a contract from Adnoc to help evaluate the Hail and Ghasha oilfields.
Adnoc said in a statement via Wam, the state news agency, that with Occidental, it would cooperate on a programme that would spend up to US$500 million to run 3D seismic surveys, drilling appraisal wells and engineering studies to evaluate development prospects of the fields by 2017.
Saoud Mubarak Al Mehairbi, the Adnoc exploration manager was quoted in the statement as saying: “Oxy will provide manpower support in form of ‘secondees’ … and will organise a number of training courses to provide human resources development opportunities.”
It has been reported that previous geology evaluations have put the Hair Dalmah and Ghasha structures in the central offshore area, and associated them with natural gas rather than oil.
The agreement comes soon after Oxy’s completion of its $10 billion Al Hosn project to bring sour (high in hydrogen sulphide) gas from the Shah field in the south of Abu Dhabi. The first gas started to be delivered from the project in early January.
February also saw news that the Emirate’s ambitious carbon capture, usage and storage (CCUS) project to sequestrate 800,000 tonnes of carbon dioxide emissions annually is on track, with Adnoc playing a key role in a joint project with Abu Dhabi Future Energy Company-Masdar.
According to Engineer Lubna Al Ameri, manager of sustainability and social responsibility at Adnoc, the project will be operational by 2016 as scheduled.
Both parties have established a joint venture company for this purpose, Mohammad Al Fadi, acting manager of health, safety and environment at Adnoc said. The joint venture company ‘Al Reyadah’ (‘leadership’ in Arabic) is the latest addition to the family of Adnoc Group of Companies, he said.
It was also announced in February that Hill International, a global leader in managing construction risk, had been awarded 3 contracts from the Civil Projects Division of Adnoc, to provide project management and site supervision services during the construction of various residential facilities with a construction value of more than $900 million. The 3 contracts have a combined estimated value to Hill of approximately $25.0 million.
At the time of writing, we are just 2 months into 2015 and if the current pace is to be maintained, it promises to be a hectic year ahead for Adnoc.