A consortium led by India’s Oil and Natural Gas Corp (ONGC) (ONGC.NS) has develop into the primary group to win a stake in Abu Dhabi National Oil Co’s (ADNOC) 40-year offshore oil concession, a deal set to assist the UAE broaden its foothold in Asia.

State-run ADNOC signed an settlement on Saturday with the ONGC Videsh-led consortium giving the group a 10 % stake within the new Lower Zakum offshore concession, with a participation payment of two.2 billion dirhams ($600 million), ADNOC mentioned in an announcement, confirming a report by Reuters. [L8N1Q005V]

ONGC Videsh is the overseas funding arm of ONGC. Other members of the consortium are Indian Oil Corp (IOC.NS) and Bharat Petro Resources Ltd, an upstream arm of refiner Bharat Petroleum Corp (BPCL.NS).

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The contract signing in Abu Dhabi was attended by Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed al-Nahyan and Indian Prime Minister Narendra Modi. It is the primary time for Indian oil corporations to participate in an Abu Dhabi oil and fuel concession.

ADNOC, like different main oil producers, needs to faucet rising demand progress and put money into India, the world’s third-biggest shopper.

The concession deal “will assist India meet its rising demand for vitality and refined merchandise, create alternatives for ADNOC to extend its market share in a key progress market, and construct a strong basis as ADNOC explores potential worldwide investments, significantly targeted on downstream alternatives”, ADNOC’s Chief Executive Sultan al-Jaber mentioned within the assertion.

In August, ADNOC mentioned it will break up its ADMA-OPCO offshore concession into three areas – Lower Zakum, Umm Shaif and Nasr, and Sateh Al Razboot and Umm Lulu – with new phrases to unlock larger worth and enhance alternatives for partnerships.

The settlement has a time period of 40 years and an efficient date of March 9, ADNOC mentioned. The present ADMA-OPCO concession, during which ADNOC has a 60 % stake that it’ll retain, produces round 700,000 barrels per day (bpd) of oil and is projected to have a capability of about 1.zero million bpd by 2021. Existing shareholders in ADMA-OPCO are BP plc (BP.L) with 14.67 %, Total SA (TOTF.PA) with 13.33 % and Japan Oil Development Co with 12 %.

ADNOC mentioned it was nonetheless finalising alternatives, with potential companions, for the remaining 30 % of the obtainable 40 % stake within the Lower Zakum offshore concession.

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Last yr, ADNOC signed a deal to retailer about 6 million barrels of oil at India’s Mangalore storage website, taking over about half of its capability.

Source: www.reuters.com

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