Shearman & Sterling has advised the Abu Dhabi National Oil Company (ADNOC) on the award of exploration rights for Abu Dhabi Offshore Block 5 to a wholly-owned subsidiary of a consortium of four Pakistani companies: Pakistan Petroleum Limited, Mari Petroleum Company Limited, Oil and Gas Development Company Limited, and Government Holdings (Private) Limited. The award is the fourth exploration block awarded in Abu Dhabi’s Second Competitive Block Bid Round launched in 2019 by ADNOC on behalf of Abu Dhabi’s Supreme Council for Financial and Economic Affairs, following Shearman & Sterling’s recent advice to ADNOC on the award on December 9, 2020, of exploration rights for Abu Dhabi Onshore Block 5 to a wholly-owned subsidiary of Occidental Petroleum Corporation, on the award on December 21, 2020, 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, and on the award on February 10, 2021, of exploration rights for Abu Dhabi Offshore Block 4 to a wholly-owned subsidiary of Japan’s Cosmo Energy Holdings Co., Ltd.
The Consortium will jointly hold a 100 percent stake in the exploration phase, investing up to AED 1.2 billion ($304.7 million), including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an offshore area of 6,223 square kilometers north-east of Abu Dhabi city. Following a successful commercial discovery during the exploration phase, the Consortium will jointly 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 and successfully concludes our involvement in Abu Dhabi’s Second Competitive Block Bid Round launched in 2019.
The Shearman & Sterling team below included associates Anna Lam and Nicole Chatrath (both Singapore-PDF).