Shearman & Sterling has advised the Abu Dhabi National Oil Company (ADNOC) on the award of exploration rights for Abu Dhabi Onshore Block 5 to a wholly-owned subsidiary of Occidental Petroleum Corporation. The award is the first exploration block awarded in Abu Dhabi's Second Competitive Block Bid Round launched in 2019 by ADNOC on behalf of Abu Dhabi's Supreme Petroleum Council.
Occidental will hold a 100 percent stake in the exploration phase, investing up to AED 514 million ($140 million), including a participation fee, to explore for and appraise oil and gas opportunities in the block that covers an onshore area of 4,212 square kilometers southeast of Abu Dhabi city. Following a successful commercial discovery during the exploration phase, Occidental will 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, following Shearman & Sterling's advice to ADNOC on the establishment of Abu Dhabi’s inaugural competitive block bid round and the successful award in 2019 of five exploration blocks to ENI, PTTEP, Occidental Petroleum Corporation, INPEX Corporation and a consortium led by Bharat Petroleum Corporation and Indian Oil Corporation.
The Shearman & Sterling team below also included associates Matthew Mullarkey, Anna Lam, and Nicole Chatrath.