BP said on Saturday it has won a minority stake in an onshore Abu Dhabi oil concession.
The company has signed an agreement with the Supreme Petroleum Council of the Emirate of Abu Dhabi and the Abu Dhabi National Oil Company (ADNOC) that grants BP a 10 percent interest in Abu Dhabi’s ADCO onshore oil concession.
In addition to the interest in the ADCO concession, BP becomes a 10 percent shareholder in ADCO.
The Abu Dhabi Company for Onshore Petroleum Operations operates the concession.
Under the agreement, BP will become the asset leader for the Bab asset group within the concession.
“Today’s agreement marks a new phase in BP’s long relationship with Abu Dhabi and, in particular, ADNOC. BP will work closely with ADNOC to realise the full potential of these world-class resources and I welcome Abu Dhabi as an important investor in BP,” BP CEO Bob Dudley said.
In connection with the transaction, BP has agreed to issue new ordinary shares representing about 2 percent of BP’s issued share capital, excluding treasury shares.
Those shares will be held on behalf of the Abu Dhabi Government.
BP said the issuance is expected to be “completed shortly.”
The ADCO concession, including the Bab, Bu Hasa, Shah and Asab fields, has total resources of between 20 to 30 billion barrels of oil equivalent over the term of the concession.
Overall production at the concession is expected to average around 1.66 million barrels of oil per day this year.
The concession, put in place in January 2015, is valid until the end of 2054.
In support of its interest in the ADCO concession and asset leadership of the Bab assets, BP said it expects to “second up to 50 technical staff to ADCO…to support the ongoing efficient operation and development of the assets.”
BP is now a 10 percent shareholder of ADCO.
France’s Total holds a 10 percent stake in the concession, Japan’s INPEX Corporation holds a 5 percent stake and South Korea’s GS Energy holds a 3 percent stake.