voda schreef op 31 januari 2012 17:31:
"If you want to be tied into the future, if you want to have ties with countries with higher demand growth, you will have to let them in. That is really the consideration within the government in terms of getting the best all-around deal for Abu Dhabi," Malesa says.
Almost all of crude exports out of UAE, the world’s third largest crude exporter, is sold to Asian countries, but when it comes to concessions Japanese Oil Development Co (Jodco) is the only Asian company with a major stake in one of its four largest oil concessions. Cosmo Oil Co, also from Japan - the leading importer of emirati oil - was awarded a minor concession in early 2011 and has stakes in a few small fields. But analysts, sources close to the government and industry observers say companies from South Korea and increasingly import-dependent China are likely front-runners when the concessions come up for renewal in 2014.
Analysts and sources close to the government expect some shift in concession control from West to East point to a memorandum of understanding signed by Adnoc and South Korea in March which secured access to at least a billion barrels of reserves for one of the UAE’s biggest crude consumers. The UAE’s oil concessions have an unusual structure which allows producers to acquire equity stakes in return for providing much of the investment and accepting profit margins that analysts say are very tight by international standards.
Adnoc holds a controlling stake in each concession which it operates with several partners - a system which irks some oil companies who do not want to share their technology with rivals. In October last year, the senior vice president of ExxonMobil, one of the largest stake holders in the big concessions, said the multi-partnered structure prevented the US energy giant from bringing in its "best" technology. "The biggest company pushing for change is Exxon," a senior industry source based in Abu Dhabi says. "They have been lobbying for that for quite some time."
But Abu Dhabi’s Supreme Energy Council (SPC), the highest authority on energy policy, will not shift readily from a concession system which has worked well for the wealthy emirate for decades.
"We are going through a very conservative period in terms of investment. I would be really surprised if they broke up the concessions," a government source says.
"If we are going to allow any new players, I would say it would be for small fields," he adds. With the first expiry of Abu Dhabi concessions looming in 2014, international oil company (IOC) executives hope Adnoc and the SPC will announce their plans for the renewals this year.
I can tell you from experience that whenever there is any kind of bidding, Adnoc would consistently pick the lowest price," Malesa says. "Even if a rival bid is within a 10-per cent band it would be rejected, even if the other bidder has better technology," he adds.
US-based Occidental Petroleum beating front-runner Shell in January to develop the large but technologically challenging Shah Gas field was seen by many analysts as evidence of Adnoc’s sensitivity to price.
The complex nature of future oil and gas extraction in the region should ensure western IOCs with experience extracting fuel from tricky deposits in other parts of the world continue to play a major role in the UAE.
"Adnoc will explore its options," a source at Adnoc says. "But you will still have the likes of BP, Shell involved."
With Asian oil demand rising while consumption in the western hemisphere wanes, Asian companies with long-term supply concerns may out bid the established IOCs to secure fuel they need to drive rapid economic growth. "The concessions are not about profits for the next 10 years but more about what this region will look like in 50 years’ time," a western oil industry source says." They recognise this will be very important in 60 years’ time so they start the relationship today."
Meanwhile on the refining front, Abu Dhabi’s International Petroleum Investment Company (Ipic) started work on a new oil refinery in Fujairah, in the third quarter of 2011. The Dh11 billion ($2.99 billion) refinery will refine 200,000 barrels of oil per day (bpd) in 2016, at the same time when Abu Dhabi’s new oil supply would come on-line, only to strengthen Abu Dhabi’s already a pivotal role as a major reliable oil producer, refiner and manufacturer of plastics.
On the domestic side also, Abu Dhabi continued to focus its attention as the market is marred by strong growth in refined products against stagnant output.
Abu Dhabi National Oil Company’s (Adnoc) refining arm Takreer is continuing its expansion activities, planning to add 50 per cent more refining capacity by 2014, which will allow self-sufficiency in oil and products for the next five to eight years. Takreer launched the Ruwais refinery expansion to install new 417,000 bpd oil refining capacity to meet growing domestic demand. It will also help capture future growth for refined products.
The construction contracts have already proved the farsightedness of the leaders and planners of the nation, who continued the development activities and thus benefited from up to 35 per cent fall in the construction materials. The majority of the country’s hydrocarbon projects were awarded to contractors last year, and during 2011 saw mobilisation and groundbreaking on these over two dozen small and large construction projects.
The oil refining company Takreer, which is responsible for operating and developing the refining industry for Adnoc is on the forefront of a new expansion.
The company’s two refineries are located in Abu Dhabi with a total refining capacity of 485,000 bpd.
The expansion to Takreer’s refinery will meet the demand growth in local market and strengthen Adnoc’s presence in the refined product international market.
Al Bawaba (Middle East) Ltd. (Middle East aggregated content)