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Sunday, December 3, 2023

Pakistani companies for the first time awarded exploration rights in UAE

A consortium of Pakistani oil exploration companies led by Pakistan Petroleum gets green signal to explore offshore UAE block and invest $305 million in UAE Oil. This is the first time that Pakistani companies have invested in UAE oil, and this would help unlock additional energy supply to Pakistan.

For the first time in history, the United Arab Emirates has awarded an oil concession to exploration companies from Pakistan.

According to Abu Dhabi National Oil Company (Adnoc), a consortium led by state-owned Pakistan Petroleum Ltd. will invest about $305 million to find crude and natural gas in the UAE’s Persian Gulf waters, Bloomberg reported.

The said consortium of leading public sector E&P companies comprises Oil & Gas Development Company Ltd (OGDCL), Pakistan Petroleum Ltd (PPL), and Mari Petroleum Company Ltd (MPCL) along with Government Holdings Pvt Ltd (GHPL).

This update comes as Adnoc is expanding its fields and inviting partners to develop new deposits as Abu Dhabi, the biggest emirate in the UAE seeks to boost production capacity by roughly 25% to 5 million barrels a day by 2030.

For Pakistan, this could help unlock additional energy supply as the demand in the developing countries increases.

“The award extends the scope of energy cooperation between the UAE and Pakistan, which imports about 100,000 barrels of Emirati oil a day. Abu Dhabi sovereign fund Mubadala Investment Co. owns a stake in a refinery in Pakistan,” Bloomberg wrote.

It was earlier reported that the four companies had formed a Special Purpose Vehicle (SPV) called NewCo with 25pc shares worth $100 million held by each over a period of five years in the UAE exploration block.

Economic Coordination Committee (ECC) of the cabinet presided by Finance Minister Shaukat Tareen on 16th August green-signaled the consortium of Pakistan’s leading petroleum exploration and development (E&P) for $400 million exploration attempt in Abu Dhabi, United Arab Emirates.

The ECC around two years ago had allowed NewCo to use their initial investment out of their own resources to go for the Abu Dhabi exploration.

Moving forward to June 2021, the members of the consortium reported to PSX that each company would invest $100 million if the bid is successful, otherwise, the NewCo would be dissolved.

Read More: Pakistan ready to open new areas for oil and gas exploration

The Minister of Energy Hammad Azhar went to Twitter to announce this and said, “This is a site that is considered rich in oil and gas and I wish these companies the best of luck.”

Similarly, the Minister of State for Information & Broadcasting Farrukh Habib tweeted, ” For the 1st time 4 Pak companies consortium PPL, MPCL, OGDCL, GHPL awarded exploration rights in Abu Dhabi. This renews partnership, business & strategic depth & opens a new phase of energy cooperation to strengthen strategic & economic ties.”