Shearman & Sterling has advised the Abu Dhabi National Oil Company (ADNOC) on the award of exploration rights for Abu Dhabi Offshore Block 3 to a consortium comprised of wholly-owned subsidiaries of Italy's Eni S.p.A and Thailand's PTT Exploration and Production Public Company Limited. The award is the second exploration block awarded in Abu Dhabi's Second Competitive Block Bid Round launched in 2019 by ADNOC on behalf of Abu Dhabi's Supreme Petroleum Council, following Shearman & Sterling's recent advice to ADNOC on the award on 9 December 2020 of exploration rights for Abu Dhabi Onshore Block 5 to a wholly-owned subsidiary of Occidental Petroleum Corporation.
Eni and PTTEP will collectively hold a 100 percent stake in the exploration phase, investing up to AED 1.51 billion ($412 million), including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an offshore area of 11,660 square kilometers north-west of Abu Dhabi city. Following a successful commercial discovery during the exploration phase, Eni and PTTEP will collectively have the right to a production concession to develop and produce such commercial discoveries. ADNOC has the option to hold a 60 percent stake in the production phase of the concession. The term of the production phase is 35 years from the commencement of the exploration phase.
The successful completion of the transaction further builds on Shearman & Sterling's long-standing client relationship with ADNOC, following Shearman & Sterling's advice to ADNOC on the establishment of Abu Dhabi’s inaugural competitive block bid round and the successful award in 2019 of five exploration blocks to ENI, PTTEP, Occidental Petroleum Corporation, INPEX Corporation and a consortium led by Bharat Petroleum Corporation and Indian Oil Corporation.
The Shearman & Sterling team below also included associates Anna Lam, and Nicole Chatrath.