Abu Dhabi extends concession at major oilfield to boost output

UAE Minister of State and ADNOC Group CEO, Sultan Ahmed Al-Jaber, speaks during the Abu Dhabi International Petroleum Exhibion and Conference (ADIPEC) on Nov. 13, 2017, at the Abu Dhabi National Exhibition Center. (AFP/Karim Sahib)
Updated 14 November 2017
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Abu Dhabi extends concession at major oilfield to boost output

ABU DHABI, UAE: The Abu Dhabi National Oil Company (ADNOC) said Tuesday it had signed an agreement with US and Japanese oil firms to extend their concessions and boost output at the emirate’s biggest oilfield.
ADNOC said in a statement it signed the agreement with US giant ExxonMobil and Japan’s INPEX to raise output at the Upper Zakum offshore field by around 350,000 barrels per day to one million bpd by 2024.
The agreement extended the concession of the two companies by a decade to end by 2051.
Located 83 kilometers (52 miles) northwest of Abu Dhabi, Upper Zakum is the world’s fourth-largest oilfield and the second-largest offshore, containing almost half of the United Arab Emirates’ proven reserves — nearly 100 billion barrels.
“This agreement is another milestone in our efforts to forge partnerships that bring technology, expertise and capital aimed at delivering greater economic value and levels of recovery from our resources,” ADNOC CEO Sultan Al-Jaber said.
The agreement is part of efforts by ADNOC to push UAE production capacity to 3.5 million bpd from about 3.2 million bpd currently.
Japan’s INPEX began the partnership with ADNOC to develop Upper Zakum in 1978. They were joined by ExxonMobil in 2006.
No financial details were given for the agreement but the ongoing project is estimated to cost around $10 billion. ADNOC has 60 percent of the concession, ExxonMobil 28 percent and INPEX 12 percent.
ADNOC on Tuesday also signed an agreement with a subsidiary of China National Petroleum Co. (CNPC) to raise the onshore Bab field’s production by 30,000 bpd to 450,000 bpd by 2020.
On Monday, ADNOC said it will float a minority stake in its petrol station subsidiary in the first privatization of the totally state-owned oil sector.


Volvo quits Iran as US sanctions pressure mounts

Updated 25 September 2018
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Volvo quits Iran as US sanctions pressure mounts

  • Volvo cannot get paid in Iran due to US sanctions
  • Plans were for at least 5,000 trucks to be assembled in Iran Saipa Diesel says zero Volvo trucks assembled since May

STOCKHOLM, Sweden: Swedish truck maker AB Volvo has stopped assembling trucks in Iran because US sanctions are preventing it from being paid, a spokesman for the company said on Monday.
The sanctions against Iran, reimposed on Aug. 6 by US President Donald Trump after his decision to pull out of a nuclear deal with Tehran, have forced companies across Europe to reconsider their investments there.
Volvo spokesman Fredrik Ivarsson said the trucks group could no longer get paid for any parts it shipped and had therefore decided not to operate in Iran in another blow to the country’s car industry, which unlike the energy and banking sectors, had managed to sign contracts with top European firms.
“With all these sanctions and everything that the United States put (in place) ... the bank system doesn’t work in Iran. We can’t get paid ... So for now we don’t have any business (in Iran),” Ivarsson told Reuters by telephone.
Before the sanctions were reimposed, Volvo had expressed an ambition for Iran to become its main export hub for the Gulf region and North Africa markets.
The European Union has implemented a law to shield its companies, but the sanctions have deterred banks from doing business with Iranian firms as Washington can cut any that facilitate such transactions off from the US financial system.
Volvo was working with Saipa Diesel, part of Iran’s second-largest automaker SAIPA, which was assembling the Swedish firm’s heavy-duty trucks from kits shipped to Iran.
Ivarsson said Volvo had no active orders in Iran as of Monday.
A commercial department manager at Saipa Diesel confirmed that sanctions had prompted Volvo Trucks to terminate their partnership agreement.
“They have decided that due to the sanction on Iran, from (May) they couldn’t cooperate with us. We had some renovation planned in Iran for a new plant but they refused to work with us,” said the manager, who declined to be identified.
More than 3,500 Volvo trucks had been assembled by Saipa Diesel in the year to May, but none had been assembled in this financial year although the original deal was for at least 5,000 trucks, the manager told Reuters.
Swedish truckmaker Scania, which is owned by Volkswagen , said it had canceled all orders that it could not deliver by mid-August due to sanctions, while French carmaker PSA Group began to suspend its joint venture activities in Iran in June.
Germany’s Daimler has said it is closely monitoring any further developments, while carmaker Volkswagen has rejected a report that suggested it had decided against doing business in Iran.