UAE Asks Oilfield Bidders for 2-Month Offer Extension

Source: Reuters 10/14/2014, Location: Middle East

The United Arab Emirates has asked bidders for its biggest onshore oilfields to extend their offers by two months until Dec. 31, sources familiar with the matter said, as the country considers bringing in Asian firms after decades-long partnerships with western majors.

Nine Asian and western firms have bid for stakes in the Abu Dhabi Company for Onshore Oil Operations ( ADCO ) concession after a deal with western oil majors that dates back to the 1970s expired in January.

State-run Abu Dhabi National Oil Company ( ADNOC ) has asked the nine bidding companies to extend offers that were due to expire around Oct. 22 until Dec. 21, three sources said.

Industry observers say any changes in the concessions would be made at the highest decision-making body for the oil and gas industry, the Supreme Petroleum Council. They say there is a difference in opinion inside the SPC over whether to stick with western companies, or make room for newcomers from Asia, while some would like to see ADNOC operating the fields alone.

ADNOC could not be reached for comment and none of the nine companies would comment. One source said however that it was unlikely any company would refuse ADCO's request.

"Is any company going to say 'no our bids have expired' The answer is no. No company is going to go through this effort and then say our offers are not valid anymore," the source said.

ExxonMobil , Royal Dutch Shell , Total and BP - have each held 9.5 percent equity stakes in the ADCO concession since the 1970s. Portugal's Partex had a 2 percent stake, and the rest was held by ADNOC .

After the deal expired in January, ADNOC took 100 percent of the concession. Shell, Total and BP have made their new bids, which are being evaluated by the government of Abu Dhabi, the capital of the UAE, while Exxon has decided against bidding, sources have told Reuters.

U.S. firm Occidental Petroleum Corp , Italy's ENI , China National Petroleum Corp. (CNPC), Norway's Statoil , Japan's Inpex and Korea National Oil Corp have also bid for the new deal.

Each company submitted two proposals last year - one for a 5 percent stake and another for a 10 percent stake, with a one year validity, the first source said.


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