ExxonMobil in final talks on Upper Zakum

ExxonMobil is in final negotiations to take to a stake in the massive Upper Zakum oil field.

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By  J Shankar Published  May 26, 2005

ExxonMobil has seen off the efforts of BP and Royal Dutch/Shell Group to be selected by the Supreme Petroleum Council (SPC) in Abu Dhabi to take part in the final negotiations to develop the Upper Zakum oil field. “The first stages in the negotiations overall began a few years ago to select a strategic partner capable of providing advanced technology, particularly in the subsurface technology applications, in order to assist in increasing production in the Upper Zakum oilfield and to overcome future technical challenges,” highlighted the Abu Dhabi National Oil Company (ADNOC). Following the conclusion of this last round of talks, the oil major is expected to acquire a 28% equity stake in the project, the basic aim of which is to increase the field’s output from 550,000 barrels per day (bpd) to 750,000bpd. In response to the news, Tim Cejka, president of ExxonMobil Exploration, said: “We are committed to applying ExxonMobil’s broad range of industry-leading technologies and operating capabilities to assist Abu Dhabi in obtaining maximum recovery and value from this important national resource. In addition, we look forward to co-operating closely with ADNOC in the areas of training and skill development.” Five years ago, ADNOC had reached agreement on the development of Upper Zakum with a consortium comprising BP and Total, but the SPC failed to ratify the deal. Later, the Council asked a number of international oil companies — ExxonMobil, Shell, Jodco, ChevronTexaco, BP, and Total — to submit bids for the development of the giant oilfield. Upper Zakum is one of the world’s largest oil fields, with potential for substantial growth. The Upper Zakum development is a key part of one the leading members of the Organisation of Petroleum Exporting Countries’ (OPEC) plans to boost output capacity from 2.5 million barrels per day to 3.2 million barrels per day by the end of 2006. The UAE holds around 10% of the world’s proven oil reserves, most of which lie in Abu Dhabi, the country’s capital and the largest of the seven emirates.

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