Story by Bloomberg
Occidental Petroleum Corp., one of 11 international oil companies invited to bid for rights to develop Abu Dhabi’s largest onshore fields, agreed to a $500 million exploration project in the emirate over two years.
Occidental will work with Abu Dhabi National Oil Co., the state-owned crude producer known as Adnoc, to explore for oil at the Hail and Ghasha offshore fields in the Persian Gulf, Adnoc said in a statement distributed by the WAM state news agency. The Houston-based company would have a 30 percent share in the exploration project that runs through 2017, Adnoc said.
Occidental, the second-largest independent U.S. oil producer, declined to comment when contacted Tuesday by Bloomberg.
Abu Dhabi, the largest sheikhdom in the United Arab Emirates, is seeking to boost oil-production capacity to 3.5 million barrels a day by the end of 2017 from about 3 million barrels now. Last month, Total SA signed a contract making it Adnoc’s first partner in a 40-year concession for Abu Dhabi’s biggest onshore oil fields.
Middle Eastern oil producers are adding capacity to pump crude for export amid a global oversupply driven partly by a surge in U.S. shale output. Brent crude, a benchmark for more than half of the world’s oil, has dropped 44 percent in the last six months.
Revised bids on Abu Dhabi’s 40-year onshore development were due Tuesday, Abdullah Nasser Al Suwaidi, the company’s director general, said on Monday. Occidental was among the companies initially invited to make offers in 2012.
Others invited include Exxon Mobil Corp., Royal Dutch Shell Plc, BP Plc, China National Petroleum Corp., Japan’s Inpex Corp., Korea National Oil Corp., Norway’s Statoil ASA, Russia’s OAO Rosneft and Eni SpA of Italy.
Occidental has sought buyers for assets in North America, the Middle East and North Africa to focus on fewer areas of profitable growth. It’s active in Abu Dhabi, with a 40 percent stake in the Shah natural gas project and a partnership with Total in the Dolphin Energy Ltd. gas pipeline that runs to the U.A.E. and Oman from Qatar.