The Abu Dhabi National Oil Company (ADNOC) awarded Italy's ENI and Thailand's PTT Exploration and Production (PTTEP) two offshore exploration blocks, covering a combined area of more than 8,000 square kilometers.
The blocks, called Offshore 1 and Offshore 2 in the emirate's northwest, are the first to be awarded among the areas ADNOC offered for commercial bidding as part of Abu Dhabi's first-ever competitive open block licensing round that began in April 2018.
Under the agreement, Eni will operate the areas and PTTEP and Eni will invest at least $230 million for oil and gas exploration. The two companies will both hold a 100 percent stake in the exploration phase.
ADNOC has the option to hold a 60 percent stake in the production phase, following any commercial discovery.
The concession agreements were signed by ADNOC CEO Sultan Ahmed Al Jaber, Eni CEO Claudio Descalzi and PTTEP President and CEO Phongsthorn Thavisin over the weekend during the Atlantic Council Global Energy Forum in Abu Dhabi.
"With this agreement we are all excited because it's the first ever time we've come into the UAE (United Arab Emirates)," Thavisin told CNBC after the signing. He described his company as primarily focused on Southeast Asia but with key interests in the Middle east, particularly Oman and the UAE. And he expressed his optimism on working with Eni, which he called a "world class" company and global leader in exploration.
"To gain the confidence and trust from ADNOC, the combination between an IOC (international oil company) like Eni and NOC (national oil company) like ADNOC would really lift us a bit also."
Natural gas goals
The Thai exploration and production company currently has 40 exploration and production projects in 11 countries, with 70 percent of operations in gas and the other 30 percent in oil, its CEO said.
"We believe we have the experience to compliment ENI and ADNOC in the hopefully successful exploration and development that can fulfil the mission ... for the UAE to become a gas exporter," Thavisin added.
The United Arab Emirates holds the world's seventh-largest proven oil reserves, with the vast majority in Abu Dhabi. It also holds 3.1 percent of global proven natural gas reserves, and plans to gradually develop those reserves through offering exploration concessions. Its goal, UAE ministers have said, is ultimately to transition from being a net importer of natural gas to a net exporter.