While oil and gas contractors and companies try to cope with the oil price slump, one oil and gas giant has recently managed a coup of sorts. BP has succeeded in cementing a deal with the government of Abu Dhabi for one of the biggest oil fields in the Middle East, as oil price shows signs of recovery.
The deal will see BP get a stake of 10 percent in an oil field in Abu Dhabi. In lieu, the government will receive a stake worth about $2.2 billion (£1.8 billion) in the company. The deal allows Abu Dhabi a two percent stake in the oil business of BP. The Abu Dhabi government will also become one of the largest shareholders in BP.
BP will have a stake in the Abu Dhabi Company for Onshore Petroleum Operations and will also receive unfettered access to oil fields. It is estimated that these oil fields have the ability to produce 20 to 30 billion oil barrels for the 40-year period of the deal.
BP already has a presence in Abu Dhabi. It has operated several oil fields for the last 40 years and has been in the country as long as 77 years. The latest deal will see the oil major producing about 165,000 barrels a day. Production in Abu Dhabi will surge to 260,000 barrels a day from its current 95,000 barrels.
After oil price slumped two years ago, it now shows signs of recovery. This has been facilitated by the oil-producing nations, both OPEC and non-OPEC countries, agreeing to slash their output.
Bob Dudley, CEO of BP, said that the deal further cements the relationship between Abu Dhabi and BP and that the company will be using its technical staff, state-of-the-art technology, and experience, to operate mature oil fields to maximise production.