A historic agreement has been inked giving a consortium of Indian oil and gas companies a stake in Abu Dhabi’s hydrocarbon resources.
His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and His Excellency Narendra Modi, Prime Minister of India, signed the agreement awarding a consortium of Indian oil companies a 10% interest in Abu Dhabi’s offshore Lower Zakum concession.
This agreement marks the first-time Indian oil and gas companies have been given a stake in Abu Dhabi’s hydrocarbon resources.
Prime Minister Modi says: ‘The offshore concession in favour of the Indian consortium has taken our bilateral engagement in the oil and gas sector to a new level, which befits the comprehensive strategic partnership between our two countries. I am happy to note that we have progressed from a buyer-seller relationship to an era of mutual investments in the oil and gas sector.’
The consortium contributed a participation fee of $600 million to enter the concession. The agreement has a term of 40 years.
Alongside this, ADNOC and the Indian Strategic Petroleum Reserves (ISPRL) also agreed to implement the strategic crude oil storage facility, in the southern Indian city of Mangalore. The partnership with ISPRL, an Indian government-owned company mandated to store crude oil for strategic needs, covers the storage of 5.86 million barrels of ADNOC crude oil in underground facilities, at the Karnataka facility.
The storage facility will help ensure India’s energy security, as well as enable ADNOC to competitively meet market demand in India and across the south east Asian economies.