The Abu Dhabi National Oil Company,ADNOC, signed today a comprehensive strategic framework agreement with the Public Joint Stock Company Gazprom Neft,Gazprom Neft, to explore new opportunities for collaboration in both the upstream and downstream sectors, as well as in artificial intelligence and other innovative technologies.
The cooperation brings together two leading energy producers to collaborate in areas of strategic importance for both companies and reinforces the strong bilateral relations between the United Arab Emirates,UAE, and Russia. It also underscores ADNOC’s drive to leverage value-add partnerships to unlock and maximise value across its full value chain as it accelerates delivery of its 2030 smart growth strategy.
In celebration of the friendly ties between both countries, the exchange of the signed framework agreement was witnessed by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and His Excellency Vladimir Putin, President of the Russian Federation, on the occasion of the president’s state visit to the UAE.
The agreement was exchanged by Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Mr. Vladislav Baryshnikov, Member of the Management Board and Deputy CEO for International Business Development of Gazprom Neft.
Under the terms of the agreement, ADNOC and Gazprom Neft will jointly explore opportunities for collaboration in relation to Abu Dhabi’s exploration and production concessions. This potential for collaboration in relation to Abu Dhabi’s exploration and production concessions builds on the momentum of the successful conclusion of Abu Dhabi’s debut competitive exploration and production bid round.
In addition, the two partners will jointly assess strategic opportunities for collaboration in sour gas exploration and production. ADNOC is a leader in sour gas field development and production with extensive experience gained from its Shah sour gas field in the Emirate of Abu Dhabi, where it plans to increase production from about 1.3 to 1.5 billion standard cubic feet per day,bscfd, of natural gas. Also, ADNOC is developing the Ghasha ultra-sour gas concession, which is expected to produce more than 1.5 bscfd of natural gas by around 2025.
Both companies will also explore potential opportunities for collaboration in enhanced oil recovery,EOR, techniques that could unlock and maximize value from maturing reservoirs. Collaboration on the various EOR applications will support ADNOC’s production growth plans and enhance hydrocarbon recovery rate towards its 70 percent aspiration, where commercially viable.
Today, ADNOC is improving the conventional efficiencies in hydrocarbon production by injecting carbon dioxide,CO2, captured at its Al Reyadah facility into some of Abu Dhabi’s oil fields to boost oil production in EOR. Gazprom Neft has a successful track record of utilizing cutting-edge EOR techniques, including polymer and surfactant flooding.
ADNOC and Gazprom Neft have also agreed to evaluate collaboration opportunities in production analytic systems for integrated operations in both Upstream and Downstream using artificial intelligence, as well as other areas across the value chain, with the goal of helping both companies to unlock greater value and drive efficiencies.
Dr. Al Jaber said: “This comprehensive framework agreement with Gazprom Neft is a natural evolution of the close and deep bilateral relations between the UAE and Russia, and provides a foundation to strengthen and expand the strategic energy relationship between both countries. It also further demonstrates how ADNOC is leveraging world-class partnerships to create, unlock, and maximize value from our substantial assets and resources for the benefit of the UAE and our partners.
“The strategic agreement offers the potential for exciting new opportunities for both companies, in the Upstream and Downstream sectors, as well as in artificial intelligence and sour gas where ADNOC has vast untapped reserves. It is our firm hope that we can convert this framework agreement into a new, mutually beneficial partnership that will create long-term and sustainable value.”
The framework agreement will allow ADNOC and Gazprom Neft to combine and leverage their deep technological and operational expertise in various fields and marks another step in ADNOC’s expanded approach to strategic partnerships and co-investments as it creates a more profitable upstream, a more valuable downstream and a more sustainable and economic gas supply.
Mr. Baryshnikov said: “The Strategic Framework Agreement concluded between Gazprom Neft PJSC and ADNOC marks a major milestone in the developing relationship between our two companies. It creates a platform for cooperation in Research and Development as well as Upstream and Downstream sectors. I have every confidence that our expertise and resources, pooled together, will contribute to strengthening the positions of both companies in the oil and gas market. Moreover, our partnership builds capacity to deliver breakthrough solutions that can be used to achieve the goals of Gazprom Neft technology strategy and to overcome the challenges confronting the industry.”
Gazprom Neft is primarily engaged in oil and gas exploration and production, refining, and the production and sale of petroleum products. It is one of the world’s top ten public companies by proven liquid hydrocarbon reserves, and a global leader in its rapidity in reserves replacement.
The company’s production and refining volumes – which in 2018 reached 92.9 million tonnes of oil equivalent,mtoe, and 42.9 million tonnes of oil, respectively – place it among the top three most important companies in Russia. Its products are sold throughout Russia and exported to over 50 countries worldwide.