A top executive of the French oil company Total said they are pleased with the new concession agreement signed with Abu Dhabi National Oil Company (Adnoc) and the Supreme Petroleum Council to develop Abu Dhabi’s oil fields for forty years.

“We are happy and honoured. We have made all the efforts to show Adnoc and Supreme Petroleum council how committed we are for Abu Dhabi. We are happy that they have recognised our commitment,” said Hatem Nuseibeh, Total’s UAE president, speaking to Gulf News.

Total will have a 10% stake in the new renewed agreement announced on Thursday.

The concession covers the fifteen principal onshore oil fields and represents more than half of the Emirate’s production.

Nine Asian and western oil companies bid for stakes in the concession after a deal with western oil majors dating back to the 1970s expired in January last year.

ExxonMobil, Royal Dutch Shell, Total and BP had each held 9.5% equity stakes in the Adco (Abu Dhabi Company for Onshore Oil Operations Limited) concession since the 1970s.

A number of oil companies like Shell, BP, Occidental Petroleum Corp from the US, China National Petroleum Corp, (Cnpc), Italy’s ENI, Statoil from Norway and Japan’s Inpex have bid for the concessions.

Getting a 10% share means that the production in 2015 will represent 7% of Total’s worldwide production, Nuseibeh said.

“The fact is that it is for forty years. For oil companies it is important to have access to oil reserves and production for a long period. The UAE is a stable country and when we talk about future production and we are sure about what the future production would be.”

He did not divulge details about investments.

“We have to see with Adco and Adnoc what the investments would be. We would invest our 10% share of what Adnoc has planned for Adco.”

On falling oil prices, he said oil companies always look at long term oil prices.

“When we look at the oil prices, we don’t look at 2015 or 2016. We look over a long period like over ten years. When we look at the history of oil business, we’ve had many cycles when the oil price went down,” he said.

“This just another cycle. We in Total, started in 2013 an effort to cut the costs to be able to survive at different oil prices. We were a precursor in cutting the costs. The low oil prices could be positive in a way that it allows oil companies to cut the excess fat and become more efficient.”

The French oil company is aiming to cut exploration spending by 30% in 2015 to cope with falling oil prices, according to media reports.

The company is present in Saudi Arabia, Oman, Qatar and Kuwait too. In the UAE, the company is involved in a number of projects.

The group holds a 24.5% stake in Dolphin Energy Limited in partnership with Mubadala and is a partner in the Shams solar power project with Masdar.

Nuseibeh said they hope to increase the volume of gas imported into the UAE according to the demands of the country.

“The real challenge of the Adco concession is that the objectives given by Abu Dhabi is to reach a recovery factor of 70% of all the reservoirs and we have to put into place to enhance our recovery methods to be able to achieve the 70% recovery factor.

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Source: Gulf News