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BP presented a substantial bid for Abu Dhabi Company for Onshore Petroleum Operations (Adco) concession, a top company representative said on Tuesday.
“We do want to be here for long term. Our focus is very much on Adco. We did present a substantial bid that was put in,” said Martin Townshend, Regional President, Middle East, BP at a press conference during the Abu Dhabi International Petroleum Exhibition and Conference (Adipec).
He declined to divulge further details on the concession saying the matter is confidential.
Abdul Munim Saif Al Kindy, Chief Executive Officer of Adco, told reporters on Monday that talks are still continuing on awarding concessions and there is no rush to select the partners.
Adnoc holds 60 per cent in Adco while 40 per cent is being awarded to international oil companies to develop onshore oilfields for a period of 40 years.
Adnoc earlier this year granted a 10 per cent stake to French oil major Total, 5 per cent to Japan’s Inpex and 3 per cent to South Korea’s GS Energy. It is yet to take a decision on the remaining companies to be part of the new concession.
Meanwhile, BP sees oil price hovering in the $60-a-barrel range for at least the next three years as supply increases and demand slows.
“In terms of supply and demand, you don’t see demand exceeding supply until the back end of next year. When that does happen, you would still need to work off stocks, which could take another couple of years,” he said.
The company continues to invest in the Middle East despite lower oil prices. The two big capital investments are in Oman and Iraq, according to Townshend. “Those continue ahead. There is no change there. This year, the gross budget in Iraq is $2.5 billion, Oman is about $700 million in capital.”
“We are looking to renegotiate with contractors and subcontractors to bring down the costs.”
In a separate press conference, Patrick Pouyanne, Chief Executive Officer of Total said that the Adco concession is huge and they are progressing according to the plan.
“There are many opportunities in Adco concession. In 2015, the production is around 1.6 million barrels of oil per day with an objective to increase output to 1.8 million barrels of oil per day by 2017.”
On Iran, he said they will be interested in oil and gas, petrochemicals and marketing sectors but will wait till sanctions are removed.
He said they see more opportunities opening up when oil prices are low as they are likely to face less competition from other oil companies who go through tough times financially.
He added that oil majors are well positioned to grow during low oil prices but that they should be patient when it comes to mergers and acquisitions as values have not fallen far enough.
Talking about LNG plant in Yemen, he said that they have stopped gas production at the plant due to the conflict.
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