Adnoc signs deal with Shell for deep-gas play

Nov 10, 2008 01:00 AM

The Abu Dhabi National Oil Co (Adnoc) has signed an agreement with Royal Dutch Shell to evaluate potential joint exploration, development and production of offshore deep gas fields prospects in Abu Dhabi.
Shell plans to examine deep exploration opportunities and endorse its technical assessment to Adnoc in the next three months. The proposal is expected in February, according to Shell, saying it is hopeful to become Adnoc's technical partner.

Malcolm Brinded, the executive-director for exploration and production and a board member at Shell, stressed the opportunity to co-operate with Adnoc on deep gas exploration.
"Shell hopes to move forward rapidly with final agreements in order to quickly begin joint exploration and development activities," he added.

Offshore deep-gas deposits could be trapped in reservoirs at depths of around 5,000 metres, proving to be financially and technically challenging. Shell has demonstrated its deep gas capabilities in Western Canada where it landed in one of the biggest natural-gas finds in recent years. Shell has also tried unlocking deep gas reserves in Libya and Oman.
The company, which has been in Abu Dhabi since 1939, is a joint venture partner with Adnoc in the Abu Dhabi Onshore Co (Adco) with an interest of 9.5 % and in the Abu Dhabi Gas Industries (Gasco) with an interest of 15 %.

The UAE, which sits on the world's fifth-largest natural gas reserves, seeks to tap more gas supplies to power its strong economic growth. The country has an estimated reserve of 215 tcf of natural gas. But most of its gas resources are either sour (with significant amount of sulphur) or trapped in complex rock formations that need advanced technical capabilities to unlock.
In July Adnoc awarded a major contract to ConocoPhillips to develop its sour gas reserves. This kind of contract is a big ticket for international oil companies to take part in the country's prospective hydrocarbon plays.

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