The Abu Dhabi National Oil Company (Adnoc) and Mubadala Investment Company signed a framework agreement to explore together potential global growth opportunities that build on the partner's refining and petrochemicals assets. The oil company also announced an investment of $ 1.4 billion to upgrade and expand its Bu Hasa Field as it ramps up onshore crude production capacity.
Abu Dhabi/UAE — The agreement between Adnoc and Mubdala was signed during the Abu Dhabi International Petroleum Conference and Exhibition (Adipec) in Abu Dhabi. The company announced that the agreement would help to maximize value from hydrocarbon resources, in line with the leadership’s directives of stretching the value of every barrel of oil produced. Mubadala has developed a diverse portfolio of refining and petrochemicals assets including, Cepsa, OMV, Cosmo Oil, Parco, Nova Chemicals and Borealis. The refining operations, in this portfolio, are renowned for their technical and commercial excellence and are net buyers of crude, while the petrochemical operations include leading proprietary technologies for production of polyolefins and other products.
As part of the framework agreement, the partners will explore the potential for the processing of crude oil and other hydrocarbons supplied by Adnoc, as well as potentially utilizing technologies owned by Mubadala with product offtake by other companies of the oil producer. This end-to-end investment model allows for the UAE to not only assure long-term security of its hydrocarbon resources but allows for margin capture along the value chain.
Expansion of Bu Hasa Field
Adnoc also announced an $ 1.4 billion investment to upgrade and expand its Bu Hasa field that will increase crude oil production capacity to 650,000 barrels per day (bpd). The company described the expansion as an important step towards delivery of their 2030 smart growth strategy that seeks to increase its crude oil production capacity and reduce cost to create a more profitable upstream business.
An Engineering, Procurement and Construction (EPC) contract has been awarded to Tecnicas Reunidas SA by the company’s subsidiary, Adnoc Onshore, which operates the field. The works are expected to take 39 months to complete and the upgrade will increase oil production capacity from 550,000 bpd to 650,000 bpd by the end of 2020.
The award of the EPC contract follows the recent endorsement, by Abu Dhabi’s Supreme Petroleum Council’s, of the oil producer’s plans to increase its crude oil production capacity to 4 million barrels per day (mmbpd) in 2020, and 5 mmbpd in 2030.
The Bu Hasa field, located 200 km south of Abu Dhabi city, is one of the company’s oldest oil fields, with production starting in 1965. It is operated by Adnoc Onshore.