The U.A.E.’s Supreme Petroleum Council (SPC) has objected to a deal whereby BP Amoco and TotalFinaElf would take on equity stakes in the country’s upstream developments, according to reports on November 29th.
The oil majors were to acquire shares in the Zakum Development Co. (Zadco) from the state-owned Abu Dhabi National Oil Co. (Adnoc), but the SPC rejected a package that would have given shares of 14.67 percent and 13.33 percent, respectively, to BP and TotalFinaElf.
The two companies have long-standing equity stakes in the Abu Dhabi Marine Operating Co. (Adma-Opco) and the Abu Dhabi Co. for Offshore Oil Operations (Adco), but some U.A.E. oil officials are opposed to further foreign investment in oil fields already under production, preferring to see investment in new projects.
Some Adnoc officials are in favor of foreign investment for existing oil fields, but say that additional companies should be recruited through an international tender.
Adnoc owns 88 percent of Zadco, with Japan’s Jodco holding the remaining 12 percent. Zadco currently produces around 500,000 b/d from the giant Upper Zakum oil field, which was expected to see output of 800,000 b/d, but has never yielded more than 600,000 b/d.
Abu Dhabi produces around 2.1 million b/d of the U.A.E.’s total production of 2.33 million b/d, while Dubai contributes the rest.