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Abu Dhabi awards Spanish firm stake in offshore oil concession

Abu Dhabi National Oil Co. (ADNOC) said on Sunday it has awarded Spanish Cepsa firm a 20 percent share in a concession of two offshore oil fields in a deal worth $1.5 billion.

Published: 18 February 2018 15:20 CET

Abu Dhabi awards Spanish firm stake in offshore oil concession

A Cepsa-owned and operated oil refinery on the Spanish Canary island of Tenerife. Photo: Desiree Martin/AFP

The 40-year deal aims to double production at the emirate's offshore fields of SARB and Umm Lulu to 215,000 barrels per day, state-owned ADNOC said in a statement.

Its subsidiary, ADNOC Offshore, will retain a 60 percent stake in the project while the remaining 20 percent will be awarded to another company, the statement said.

Cepsa, a global oil and gas company, is wholly-owned by Abu Dhabi's Mubadala Investment Company which has assets worth over $125 billion.

“This long-term agreement is a milestone in the development of Abu Dhabi's integrated oil and gas sector and in the delivery of ADNOC's 2030 smart growth strategy,” CEO of ADNOC Sultan al-Jaber said.

Last week, ADNOC awarded a 10 percent stake in the offshore concession of Lower Zakum to an Indian consortium led by ONGC Videsh company for $600 million.

ADNOC Offshore also retained a 60 percent stake in that concession, with plans to award the remaining 30 percent to a third company. The aim is to more than double production at Lower Zakum to 450,000 bpd.

The vast majority of the United Arab Emirates' crude oil reserves are located in Abu Dhabi — capital of the Gulf emirate.

Abu Dhabi in recent years has granted concessions to ExxonMobil, Total, BP, Shell and China's CNPC, among others, as old concessions have expired. The new concessions have been offered at nearly half the duration of the old concessions — with ADNOC taking majority stake in the projects.

The national company aims to increase the Abu Dhabi's oil production capacity from 3.2 million barrels per day to 3.5 million by the end of 2018.

NGOs take Norway to European Court over Arctic oil exploration

Northern Norway. Photo by Vidar Nordli-Mathisen on Unsplash.

It’s the latest turn in a legal tussle between environmental organisations Greenpeace and Young Friends of the Earth Norway on one side and the Norwegian state on the other.

The organisations are demanding the government cancel 10 oil exploration licenses in the Barents Sea awarded in 2016, arguing it was unconstitutional.

Referring to the Paris Agreement, which seeks to limit global warming to less than two degrees Celsius above pre-industrial levels, the organisations claim that the oil licenses violated article 112 of Norway’s constitution, guaranteeing everyone the right to a healthy environment.”

The six activists, alongside Greenpeace Nordic and Young Friends of the Earth Norway, hope that the European Court of Human Rights will hear their case and find that Norway’s oil expansion is in breach of human rights,” Greenpeace said in a statement.

In December, Norway’s Supreme Court rejected the claim brought by the organisations, their third successive legal defeat.

READ MORE: Norway sees oil in its future despite IEA’s warnings

While most of the judges on the court agreed that article 112 could be invoked if the state failed to meet its climate and environmental obligations– they did not think it was applicable in this case.

The court also held that the granting of oil permits was not contrary to the European Convention on Human Rights, in part because they did not represent “a real and immediate risk” to life and physical integrity.

“The young activists and the environmental organisations argue that this judgment was flawed, as it discounted the significance of their environmental constitutional rights and did not take into account an accurate assessment of the consequences of climate change for the coming generations,” Greenpeace said.

On Friday, the Norwegian government unveiled a white paper on the country’s energy future, which still includes oil exploration despite a warning from the International Energy Agency (IEA).

The IEA recently warned that all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050.

The Norwegian case is an example of a global trend in which climate activists are increasingly turning to courts to pursue their agenda.

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