Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

BP squeezed out of Abu Dhabi offshore oil as China, Italy win

BP news.
BP is to undertake a study on Australian hydrogen.

When oil-rich Abu Dhabi put a string of offshore fields up for auction, suitors from China to Italy vied for a slice of the pie. Surprisingly, that piece was snatched from one of the world’s largest energy conglomerates.

BP Plc missed out on a chance to renew its partnership in oil concessions off the emirate’s shores, which expired this month. The loss of barrels — estimated at 100,000 a day — will offset growth from BP’s new projects, meaning its total oil output will stay flat this quarter.

Competitors Total SA, Eni SpA and others will take a share of the three licenses in Abu Dhabi, an emirate that produces 6 percent of the world’s oil. Now out of the picture offshore, BP will need to focus on the country’s onshore fields it won in 2016, as well as gas assets in the region such as Zohr in Egypt and Khazzan in Oman.

“It looks like the company decided the financial terms were too tight in Abu Dhabi and that they’d be better off spending their money elsewhere,” said Robin Mills, chief executive officer of consultants Qamar Energy. “The contracts are very low-return, because Abu Dhabi is very tight on the terms and drives a hard bargain.”

BP declined to comment.

Egyptian Sale

The company vowed to maintain capital discipline following crude’s slump and the Deepwater Horizon catastrophe in 2010, which saddled it with a tab of more than $60 billion in liabilities. It has recently offered mature oil assets in Egypt for sale and aims to raise $1 billion, according to people familiar with the plan.

Companies including Total, Eni, Cia Espanola de Petroleos and China National Petroleum Corp. won stakes of as much as 20 percent in the U.A.E. concessions, while Abu Dhabi National Oil Co. kept 60 percent. BP had held 14.7 percent of an Adnoc unit that operated some of the fields. Abu Dhabi still has to award the remaining 20 percent of the offshore oil concessions. Austrian oil producer OMV AG is poised to win a stake in the concession.

BP reported double-digit production growth last year. Now, with the Abu Dhabi block pumping about 700,000 barrels a day, the company loses access to the 100,000 daily barrels it could tap as a partner.

Once fully operational, Oman’s Khazzan gas project will more than make up for the lost barrels, Qamar’s Mills said. Elsewhere in the Middle East, BP and its partners are eyeing growth in Iraq, where they’re pumping more than 1.5 million barrels a day from the nation’s biggest oil field, Rumaila.

As in Iraq, the cost of producing oil in Abu Dhabi is low, and the large reserves reduce the risk that the fields won’t deliver, Mills said. BP probably decided its remaining onshore concession — and its stake in Rumaila — give it enough “low-risk” barrels, he said.

Recommended for you

More from Energy Voice

Latest Posts