ADNOC became a shareholder of the Absheron gas field
ADNOC, a company from Abu Dhabi (UAE), has made its entry into Azerbaijan's hydrocarbon sector by purchasing 15% of shares each from SOCAR and TotalEnergies in the Absheron project.
According to SOCAR's website, a deal was signed in Baku on August 4, through which ADNOC acquired a total of 30% equity participation in the Absheron project. After the transaction's completion, SOCAR and TotalEnergies will each hold 35% shares in the project, while prior to this agreement, both companies had equal equity stakes of 50% in the Absheron project.
SOCAR emphasized that this agreement will further strengthen the strategic relations between Azerbaijan and the UAE and enhance the reputation of Baku as a dependable natural gas supplier. "ADNOC's first investment in a mining project outside the UAE in Azerbaijan is another confirmation of the favorable investment climate created for foreign investors in our country."
Furthermore, SOCAR and ADNOC signed a Memorandum of Understanding, aiming to enable the State Oil Company of Azerbaijan's participation in upstream projects in Abu Dhabi, with appropriate support from ADNOC in this regard.
In addition to cooperation in the oil and gas sector, the two companies will explore potential collaboration in renewable sources, low-carbon solutions, and investment opportunities in the oil and gas sector of third countries.
As a recap, on July 10, 2023, TotalEnergies and SOCAR announced the commencement of gas and condensate production as part of the first phase of the Absheron field development in the Caspian Sea. The operator of the project is the Joint Operating Company of Absheron Petroleum B.V. (JOCAP), established by SOCAR Absheron and TOTAL E&P Absheron. The Absheron block is situated 100 km from Baku at a depth of 500 meters.
Initial estimates indicate that the field's reserves amount to 300 billion cubic meters of gas and 100 million tons of condensate, and its development is taking place in stages. The production volume during the first stage will be 1.5 billion cubic meters per year, with expectations to reach 0.7 billion cubic meters in 2023. Gas from the first phase is purchased by SOCAR. The peak production capacity of the Absheron project is projected to reach about 5 billion cubic meters of gas annually, with specific timelines yet to be determined.
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