The government approved a $400 million exploration attempt in Abu Dhabi, United Arab Emirates, by a consortium of the country’s major petroleum exploration and development (E&P) corporations in the public sector on Monday.
The decision was made at a Cabinet meeting presided over by Finance Minister Shaukat Tarin’s Economic Coordination Committee (ECC). It approved a summary of the “Petroleum Division regarding no objection certificate for issuance of parent company guarantees/corporate guarantees by each of the consortium companies, on a joint and several bases, in favor of the Supreme Council for Financial, Abu Dhabi National Oil Company (Adnoc), and Economic Affairs (SCFEA) to pursue international exploration and production opportunities.”
The country’s three oil and gas majors – Oil & Gas Development Company Ltd (OGDCL), Pakistan Petroleum Ltd (PPL), and Mari Petroleum Company Ltd (MPCL) – have formed a special purpose vehicle (SPV) in collaboration with Government Holdings Pvt Ltd (GHPL) to have a 25pc shareholding ($100m) each in the $400m over a five-year period in the UAE exploration block.
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The ECC’s decision would allow these four firms to provide guarantees to the special purpose vehicle (SPV) named NewCo in favor of SCFEA and Adnoc so that the consortium would qualify for the exploratory block for which a bid has already been made.
The ECC permitted the group to proceed for Abu Dhabi exploration around two years ago, with their initial expenditure coming from their own resources. A few months ago, the consortium members informed the stock market that, in the event of a successful offer, each member business would contribute around $100 million. In the event of a failed offer, the NewCo consortium would be dissolved.
According to official documents, PPL has gone for international exploration in addition to its domestic oil and gas exploration and development activities over the last six years and has reported that it has drilled 79 exploratory wells, including one in Iraq, with its partners, adding 0.6 trillion cubic feet (TCFs) of gas.