Lukoil increases stake in UAE's Ghasha concession to 10%

MOSCOW. May 30 (Interfax) - Austria's OMV has signed and closed an agreement to sell its 5% stake in the Ghasha concession, located in the United Arab Emirates, to Lukoil Gulf Upstream LLCSPC.

The cash consideration amounts to $594 million minus a $100 million transaction fee, OMV said.

Consequently, Lukoil's stake in the project has increased to 10%.

The Ghasha concession was awarded in November 2018 for 40 years to develop previously untapped reserves across nine offshore oil and gas fields (Hail, Ghasha, Hair Dalma, Satah, Bu Haseer, Nasr, SARB, Shuweihat, and Mubarraz) in the Persian Gulf. The water depth across these fields reaches 24 meters, with locations approximately 40 km from shore. The projected production capacity exceeds 40 million cubic meters of gas and 120,000 barrels of oil and gas condensate per day. Gas from these fields could meet over 20% of the UAE's domestic demand. The Ghasha reserves feature high concentrations of hydrogen sulfide and carbon dioxide. The project is expected to yield over 1.5 billion cubic feet of gas and 120,000 barrels of oil daily.

The concession participants include the operator, Abu Dhabi National Oil Company (ADNOC), with a 70% stake; Eni with a 10% stake; and Indonesia's PTTEP with a 10% stake. Lukoil acquired its stake in the project for $214 million in October 2019.

In October 2023, ADNOC made the final investment decision (FID) for Hail and Ghasha and awarded two engineering, procurement and construction (EPC) contracts. The offshore EPC contract is valued at approximately $8.2 billion, while the onshore contract amounts to $8.74 billion.

Three artificial islands have already been completed within the Ghasha concession area. Production was anticipated to commence this year.