French supermajor Total the next big oil company to make long-term commitments in the United Arab Emirates, a member of OPEC. File photo by A.J. Sisco/UPI. | License Photo
March 19 (UPI) -- French supermajor Total said it's followed in the footsteps of its Italian counterpart, Eni, by making long-term commitments in Abu Dhabi.
Total signed two 40-year concession agreements with state-owned Abu Dhabi National Oil. Co. that gives it a 20 percent stake in the Umm Shaif and Nasr concession and a 5 percent stake in the Lower Zakum prospect.
At a fee of $1.45 billion dollars, Total said the agreement has a price tag of about $1 per barrel of reserves.
Tom Quinn, a senior analyst for exploration and production in the Middle East for consultant group Wood Mackenzie, said that while Italian energy giant Eni beat Total to the door, it's the French supermajor that gains the edge.
"This deal will propel Total to the top international oil company spot in Abu Dhabi," he said in a statement emailed Sunday to UPI.
Eni one week ago signed an $875 million agreement with ADNOC to acquire minority shares in three offshore fields, including Lower Zakum. The Italian company said the move was a strategic one that gave it access to some of the largest pools of hydrocarbons in the world.
It was the first time that Eni received rights to Abu Dhabi's oil and natural gas sector.
For Total, the fourth largest oil and gas company in the world, signing a long-term agreement in the United Arab Emirates is about expanding its regional footprint.
"These agreements ensure Total secures long-term access to significant and competitive hydrocarbon resources that we already know very well," CEO Patrick Pouyanné said in a statement.
Japanese energy company INPEX was awarded a 10 percent stake in the Lower Zakum play off the coast of Abu Dhabi in February. Discovered in the 1960s, the field has a target rate of production of about 450,000 bpd.
The United Arab Emirates is a member of the Organization of Petroleum Exporting Countries and party to its multilateral effort to trim a market surplus with production caps. Emirati production in February averaged 2.8 million bpd, about 3 percent less than the full-year average for 2017.