A deal was signed between the Abu Dhabi National Oil Company ADNOC and Malaysia's Petroliam Nasional Berhad Petronas on Monday, which will be the first concession in the Middle East for unconventional oil resources, according to the United Arab Emirates state news agency WAM.
WAM said that the six-year agreement is the first investment by a Malaysian company in an Abu Dhabi concession.
Petronas will retain a 100 percent stake in the operating rights of the concession to explore and appraise resources in Unconventional Onshore Block 1, which covers an area of more than 2,000 square kilometres in Abu Dhabi's Al Dhafra region.
After ADNOC conducted preliminary operations in the concession area, WAM said that the parties can enter a production concession of 30 years after a successful appraisal phase. The date of the first concession to Petronas starts on the date of the first concession.
ADNOC could also have the option to hold a 50 per cent stake in the concession. WAM said that the block has the potential to create significant in-country value for the UAE.
Abu Dhabi's unconventional recoverable oil resources are estimated to be 22 billion barrels of very light and sweet crude, comparable to ADNOC's flagship lower-carbon Murban grade, WAM added.
Malaysia's King Al-Sultan Abdullah, who is in an official visit to the UAE, oversaw the signing, along with President Sheikh Mohammed bin Zayed.